M/S Patna Sanitary Emporium vs. The State Of Bihar

Facts

The petitioner, M/s Patna Sanitary Emporium, filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the petitioner was unable to file an appeal before the Appellate Tribunal due to its non-constitution. This prevented the petitioner 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, upon depositing the stipulated amounts. The respondent State authorities acknowledged the non-constitution of the Tribunal and issued an 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 Tribunal's President entered office.

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, 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 Court reasoned that the petitioner should not 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 towards it were deemed to be stayed. The Court also directed that this stay should not 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 functional. If the petitioner fails to file an appeal within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. This relief was granted in line with a similar order in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner can be extended 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 disputed tax amount, in addition to any amount already deposited under Section 107(6) of the B.G.S.T. Act? Petitioner's Contention: The petitioner argued that they are being deprived of their statutory remedy and the consequential benefit of stay due to the inaction of the respondents in constituting the Tribunal. They sought the benefit of stay as a matter of right, given the circumstances. Revenue's Contention: The respondent State authorities acknowledged the non-constitution of the Tribunal and had issued a notification to address the removal of difficulties regarding the limitation period for appeals. They did not dispute the petitioner's claim for relief arising from the non-functional Tribunal.