M/S. Prl Projects And Infrastructure Limited vs. The State Of Bihar

Facts

The petitioner, M/s. PRL Projects and Infrastructure Limited, filed a writ petition seeking to avail the statutory remedy of appeal against an order dated 23.02.2023 passed by the Additional Commissioner of State Taxes (Appeals), Darbhanga Division. The appeal was to be filed 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 the appeal and consequently from availing the benefit of stay of recovery of the balance tax amount under Section 112(8) and (9) of the B.G.S.T. Act upon depositing the prescribed amounts. 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, which stipulated that the period of limitation for 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 (if not already deposited), in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay. The recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court reasoned that this relief is necessary to balance equities and prevent prejudice to the petitioner due to the respondents' failure to constitute the Tribunal. However, the Court clarified that this stay cannot be open-ended. 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, observing all statutory requirements. If the petitioner fails to avail this remedy within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed further. The Court noted that similar relief was granted in 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 tax amount under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents, and if so, what relief can be granted? Petitioner's arguments: The petitioner argued that they are entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, as they are ready to comply with the deposit requirements under Section 112(8). They contended that the non-constitution of the Tribunal, which is the responsibility of the respondents, should not prejudice their right to avail this statutory remedy. They relied on a similar relief granted by the High Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others. Revenue/State's arguments: 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. The judgment does not record specific arguments from the revenue regarding the petitioner's entitlement to the stay in the absence of the Tribunal's constitution, beyond acknowledging the situation.