M/S Gaytri Pharma vs. The Union Of INDIA

Facts

The petitioner, M/s Gaytri Pharma, filed a writ petition before the Patna High Court 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 Act (B.G.S.T. Act). However, the Tribunal had not been constituted, thus preventing the petitioner from filing an appeal and consequently 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 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 appeal would commence only after the Tribunal's constitution and the President's assumption of office.

Held

The Court held that the petitioner is entitled to 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 should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The recovery of the balance amount and any steps taken towards it were deemed to be stayed. The Court also directed that the petitioner must file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional, within a period to be specified. If the petitioner fails to file the appeal within the specified period after 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 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 Appellate Tribunal, and if so, upon what conditions? 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 be prejudiced by this administrative inaction and should be granted the stay upon fulfilling the deposit requirements. Revenue/State's contention: The respondents acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. They did not dispute the petitioner's right to appeal once the Tribunal is functional but were implicitly seeking a balanced approach to stay the recovery.