M/S Sri Salasar Products And Commission Agent vs. The Union Of INDIA

Facts

The petitioner, M/s Sri Salasar Products and Commission Agent, 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, upon depositing the stipulated amounts. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued an 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 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 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 themselves. The recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. However, the Court clarified 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 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 expressly left undecided the ultimate merits of the appeal.

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 tax in dispute in addition to amounts already deposited under Section 107(6)? Petitioner's contention: The petitioner argued that they are being deprived of a statutory remedy due to the respondents' failure to constitute the Tribunal. They contended that they should not be prejudiced by this administrative inaction and should be granted the benefit of stay as contemplated by the Act. Revenue/State's contention: The respondents acknowledged the non-constitution of the Tribunal and issued a notification to address the issue of limitation. They did not explicitly argue against granting a stay but implicitly relied on the statutory framework which links the stay to the appeal process before the Tribunal.