M/S Gaurav Synthetics vs. The State Of Bihar

Facts

The petitioner, M/s Gaurav Synthetics, sought 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 Tribunal had not been constituted, preventing the petitioner from filing the appeal and consequently from availing the benefit of stay of 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 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. The petitioner approached the High Court for relief.

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 respondent authorities. The Court reasoned that the petitioner should be extended this benefit upon depositing 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act. The recovery of the balance amount and any steps taken towards it will be deemed stayed. The Court also held that this relief cannot be open-ended. Therefore, 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 noted that similar relief was granted in the case of 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(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondent authorities? Petitioner's contention: The petitioner argued that they are being prevented from availing a statutory remedy due to the inaction of the respondent authorities in constituting the Tribunal. They contended that they should not be penalized for this delay and should be granted the benefit of stay upon fulfilling the conditions stipulated in Section 112(8). Respondent's contention: The respondent State authorities 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 removal of difficulties, which stipulated that the limitation period for appeal would commence after the Tribunal's constitution. The judgment does not explicitly record separate arguments from the respondents beyond this acknowledgement and notification.