Mateshwari Construction vs. The State Of Bihar

Facts

The petitioner, Mateshwari Construction, filed a writ petition seeking to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). However, the Tribunal was not constituted, 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 limitation period for filing an appeal would commence only after the President or State President of the Tribunal entered 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 20 percent of the remaining disputed tax amount, in addition to any amount already deposited under Section 107(6). The Court reasoned that the petitioner should not suffer due to the respondents' failure to constitute the Tribunal. The recovery of the balance amount and any related steps were deemed stayed. However, the Court also held that this stay cannot be open-ended. To balance equities, the petitioner must 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 an appeal within a period specified after the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. The Court explicitly noted that similar relief was granted in the case of SAJ Food Products Pvt. Ltd.

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, given that the delay is attributable to the respondents? The petitioner argued that they should not be deprived of the statutory remedy of stay due to the respondents' failure to constitute the Tribunal. They contended that the notification issued by the State authorities under Section 172, which postpones the commencement of the limitation period, implicitly supports their claim for relief. The petitioner also relied on a previous order of the Court in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. The respondents acknowledged the non-constitution of the Tribunal but did not present any specific arguments against granting the stay, other than the general procedural framework.