M/S Flipkart INDIA Private Limited vs. The Additional Commissioner Of State Tax (Appeal), Central Division

Facts

M/s Flipkart India Private Limited (Petitioner) filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act) against an order passed by the Additional Commissioner of State Tax (Appeal). However, the Petitioner was unable to file the appeal due to the non-constitution of the Appellate Tribunal. This prevented the Petitioner 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 respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification (Order No. 09/2019-State Tax) 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 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, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act. The Court reasoned that the Petitioner should not 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 held that this stay cannot be open-ended. For balancing equities, 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 avail this remedy within the period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. The Court relied on a previous order in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the Petitioner is entitled to the statutory benefit of stay of recovery of the balance amount of tax under Sub-Section (9) of Section 112 of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? The Petitioner argued that they should not be deprived of this statutory remedy due to the respondents' failure to constitute the Tribunal. They contended that the notification issued under Section 172 was an acknowledgment of this difficulty. The Petitioner relied on a previous order of the High Court in a similar case. The Revenue/State acknowledged the non-constitution of the Tribunal and issued a notification to address the issue of limitation. They did not explicitly argue against granting the stay but did not concede to an open-ended stay.