M/S Indus Towers Limited vs. The Union Of INDIA

Facts

M/s Indus Towers Limited (the petitioner) filed a writ petition before the Patna High Court seeking relief due to the non-constitution of the Appellate Tribunal under the Bihar Goods and Services Tax (B.G.S.T.) Act. The petitioner was aggrieved by an order dated 07.03.2023 passed by the Additional Commissioner, State Tax (Appeal), Patna, and wished to file an appeal before the Tribunal under Section 112 of the B.G.S.T. Act. However, the absence of the Tribunal prevented the petitioner from availing this statutory remedy and from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9) of the Act. The respondent State authorities had issued a notification (Order No. 09/2019-State Tax) to address such difficulties, stating that the limitation period for appeal would commence only after the Tribunal's constitution.

Held

The Court held that the petitioner should 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. The Court reasoned that the petitioner cannot be deprived of this benefit due to the non-constitution of the Tribunal by the respondents themselves. The recovery of the balance amount and any steps taken for it would be deemed stayed. However, the Court also opined that this stay 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 made functional. If the petitioner chooses not to avail this remedy 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 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 Tribunal, upon depositing 20 percent of the remaining tax in dispute? 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 requirement. Revenue/State'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 issue of limitation periods. While not explicitly recorded as arguing against the stay, their actions and the notification implied a framework for dealing with such situations pending the Tribunal's constitution.