Verma Industries vs. State Of Bihar

Facts

Verma Industries, a proprietary concern, filed a writ petition before the Patna High Court. The petitioner sought various reliefs, primarily to avail the statutory remedy of appeal against an impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the Tribunal had not been constituted, preventing the petitioner from filing an appeal and consequently from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9) of the B.G.S.T. Act. The State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act, stipulating that the period of limitation for filing an appeal would commence only after the President of the Tribunal entered office.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, subject to the deposit of 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any related steps would be deemed stayed. However, the Court clarified that this stay would not be open-ended. The petitioner would be required to file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. If the petitioner fails to file an appeal within the period specified after the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, due to the inability to file an appeal within the prescribed period? The petitioner argued that they are being deprived of a statutory remedy and the benefit of stay due to the respondents' failure to constitute the Tribunal. They contended that the period of limitation for appeal should not commence until the Tribunal is functional. The petitioner relied on the principle that a party should not suffer due to the inaction of the authorities. The revenue/State acknowledged the non-constitution of the Tribunal and referred to the notification issued under Section 172 of the B.G.S.T. Act, which addresses the commencement of the limitation period.