Pinax Steel Industries PVT. LTD. vs. The State Of Bihar

Facts

The petitioner, Pinax Steel Industries Pvt. Ltd., 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, which also prevented them 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 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 an appeal would commence only after the President of the Tribunal entered office.

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, if not already deposited. The Court reasoned that the petitioner cannot 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 in this regard were deemed to be stayed. The Court also directed that 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 respondents would be at liberty to proceed in accordance with law. The Court explicitly left undecided the merits of the appeal itself.

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 Tribunal, upon depositing 20 percent of the remaining disputed tax amount? The petitioner argued that they are being deprived of their statutory remedy and the benefit of stay due to the respondents' failure to constitute the Tribunal. The petitioner contended that the stay should be granted as a matter of right, given the circumstances, and referred to a similar relief granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. The respondents did not record any specific arguments against this point, but their actions led to the situation.