M/S Md. Kitabul Ansari vs. The State Of Bihar

Facts

The petitioner, M/s Md. Kitabul Ansari, filed a writ petition seeking to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented the petitioner 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 respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019) under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing appeals would commence only after the Tribunal's President entered office.

Held

The Court held that the petitioner is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, subject to the deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Sub-Section (6) of Section 107 of the B.G.S.T. Act. The Court reasoned that the petitioner cannot be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any steps taken towards it were deemed stayed. The Court also directed that the petitioner must 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 the appeal within the specified period after the Tribunal's constitution, the respondent authorities would be at liberty to proceed. The Court also ordered the release of any attachment on the petitioner's bank account if the conditions are complied with. The ratio is that statutory benefits should not be denied due to administrative delays in constituting statutory bodies.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, upon depositing 20 percent of the remaining disputed tax amount? (Question of law turning on Section 112(8) and (9) of the B.G.S.T. Act). Petitioner's contention: The petitioner argued that they should not be deprived of the statutory remedy of stay due to the respondents' failure to constitute the Tribunal. They relied on the principle that a party should not suffer due to administrative inaction. Revenue/State's contention: The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification to address the situation, indicating their awareness of the procedural impediment.