Zaffar Imam vs. The Union Of INDIA

Facts

The petitioner, Zaffar Imam, 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 Tribunal was not 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 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 appeal would commence only after the Tribunal's constitution and the President's assumption of office. The petitioner sought relief from the High Court due to this procedural impediment.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (if not already deposited) in addition to any amount previously deposited under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay. Recovery of the balance amount and any steps taken would be deemed stayed. The Court reasoned that this relief is necessary to balance equities and prevent prejudice to the petitioner. However, the 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 upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court relied on a previous decision in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(8) and (9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? Petitioner's arguments: The petitioner contended that they are being prevented from availing their statutory remedy of appeal and the consequential benefit of stay on recovery due to the failure of the respondents to constitute the Tribunal. They argued that they should not be prejudiced by this administrative inaction and should be granted the stay upon fulfilling the deposit requirements. Revenue/State's arguments: The respondents acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. While not explicitly recorded as arguing against the petitioner's plea for stay, their actions and the notification indicated an awareness of the procedural deadlock. The judgment notes that the respondent State authorities acknowledged the fact of non-constitution of the Tribunal.