M/S Bakery House vs. The State Of Bihar

Facts

The petitioner, M/s Bakery House, filed a writ petition seeking to avail a statutory appeal remedy against an order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). However, the non-constitution of the Tribunal prevented the petitioner from filing the appeal and availing the benefit of a stay on 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 President entered office. The petitioner sought relief from the High Court due to this procedural impediment.

Held

The Court held that the petitioner must be extended 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 Section 107(6). The Court reasoned that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. Consequently, the recovery of the balance amount and any steps taken towards it would be deemed stayed. The Court also held that this stay cannot 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 the 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 also directed the release of any bank account attachment upon the deposit of 20% of the remaining tax in dispute.

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 amount of tax in dispute? Petitioner's contention: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay due to the respondents' failure to constitute the Tribunal. They contended that the period of limitation for filing an appeal should not commence until the Tribunal is functional, as indicated by the respondents' own notification. They relied on the principle that a litigant should not suffer due to administrative inaction. Revenue/State's contention: The respondents acknowledged the non-constitution of the Tribunal and issued a notification to address the difficulty. They did not contest the petitioner's claim for a stay subject to deposit, but emphasized the need for the appeal to be filed once the Tribunal is constituted.