Mateshwari Construction vs. The State Of Bihar

Facts

The petitioner, Mateshwari Construction, filed a writ petition seeking to avail the statutory remedy of appeal against an order dated 26.12.2022 passed by the Additional Commissioner of State Tax (Appeal), Gaya. The petitioner intended to appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the Tribunal was not constituted, preventing the petitioner from filing the appeal and consequently 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 State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act, stating that the period of limitation for appeal would commence after the Tribunal's constitution.

Held

The Court held that the petitioner should be extended the statutory benefit of stay under Section 112(9) 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 Section 107(6) 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 themselves. The recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also held that this relief of stay cannot be open-ended. The petitioner would be required to present/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 file an appeal within the period specified after the Tribunal's constitution, the respondent authorities 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 under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, considering the State's role in the delay? Petitioner's Argument: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay due to the non-constitution of the Tribunal, which is the responsibility of the respondent authorities. They contended that they should not suffer due to this administrative failure and should be granted the stay upon fulfilling the deposit requirements. They relied on a previous order of the High Court in a similar case. Revenue's Argument: 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 situation, indicating that the limitation period would commence after the Tribunal's constitution. No specific argument against granting the stay was recorded, but their actions indicated an attempt to manage the situation arising from the non-functional Tribunal.