M/S. Classic Electricals vs. The Union Of INDIA

Facts

The petitioner, M/s. Classic Electricals, 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 Act (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 under Section 172 of the B.G.S.T. Act, stating that the limitation period for filing an appeal would commence only after the President of the Tribunal entered office.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court reasoned that the petitioner should not suffer due to the administrative failure of the authorities. Therefore, 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)), the petitioner would be extended the benefit of stay. The recovery of the balance amount and any steps taken for its recovery were deemed to be stayed. The Court also noted that this relief was granted in similar circumstances in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. However, to balance equities, the Court stipulated 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 period specified after the Tribunal's constitution, the respondents would be at liberty to proceed as per law. The Court expressly left undecided any issue related to the merits of the petitioner's appeal.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? Petitioner's argument: The petitioner contended that they are being deprived of 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. They relied on the principle that a litigant should not suffer due to the delay or inaction of the authorities. Revenue/State's argument: The respondents acknowledged the non-constitution of the Tribunal and had issued a notification under Section 172 of the B.G.S.T. Act to address the issue of limitation. They did not appear to contest the petitioner's right to seek relief in the interim.