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

Facts

M/s Flipkart India Private Limited (the petitioner) filed a writ petition seeking to avail the statutory remedy of appeal against an order 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. This prevented the petitioner from availing the benefit of stay of recovery of the balance amount of tax, as contemplated under Section 112(8) and (9) of the B.G.S.T. Act, upon depositing the required amounts. The respondent 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 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 cannot be deprived of the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court directed that 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 petitioner shall be extended the statutory benefit of stay. Recovery of the balance amount and any steps taken in this regard will be deemed stayed. The Court reasoned that the petitioner should not suffer due to the respondents' failure to constitute the Tribunal. However, to balance equities, the Court stipulated that the stay is not open-ended. The petitioner will 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 the appeal within the period specified upon the Tribunal's constitution, the respondents will 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 of recovery of the balance amount of tax under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? (Question of law) 2. Whether the period of limitation for filing an appeal under Section 112 of the B.G.S.T. Act should commence only after the constitution of the Tribunal and the President entering office, as indicated by the notification issued under Section 172 of the B.G.S.T. Act? (Question of law) Petitioner's Contentions: The petitioner argued that they are being prevented from exercising their statutory right to appeal and obtain a stay on recovery due to the respondents' failure to constitute the Tribunal. They contended that they should not be penalized for this administrative lapse and should be granted the benefit of stay upon fulfilling the deposit requirements. They relied on the notification issued by the State authorities which postpones the commencement of the limitation period. Revenue/State's Contentions: The judgment records that 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. No specific arguments were recorded for the respondents against the petitioner's claim for stay, beyond acknowledging the factual situation.