Gandhi Agro Polytubes vs. The State Of Bihar

Facts

The petitioner, Gandhi Agro Polytubes, 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 Tribunal had not been constituted, preventing the petitioner from filing an appeal and 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 appeals 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, 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. Consequently, the recovery of the balance amount and any steps taken towards it would be deemed stayed. The Court also opined that this relief 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 made 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. This relief was granted in line with a similar order in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner can be extended 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 a specified percentage of the disputed tax amount? Petitioner's Contention: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay on recovery due to the respondents' failure to constitute the Tribunal. They contended that they should not suffer due to this administrative inaction and should be granted the stay upon fulfilling the deposit requirements as per Section 112(8). Respondent's Contention: The respondent authorities acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. Their implicit contention was that the petitioner should follow the procedure outlined in the notification and await the Tribunal's constitution, but the Court's order suggests they did not oppose the grant of interim relief.