M/S Mrg Constructions vs. The State Of Bihar

Facts

M/s MRG Constructions, a partnership firm, filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (BGST) Act. The petitioner was unable to file an appeal due to the non-constitution of the Tribunal, which also prevented them from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9) of the BGST Act upon depositing the stipulated amounts. The State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the BGST Act, stating that the period of limitation for filing an appeal would commence only after the Tribunal's constitution and the President's assumption of office. The petitioner sought relief from the High Court.

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 BGST Act due to the non-constitution of the Tribunal by the respondents. The Court directed that subject to the deposit of 20 percent of the remaining amount of tax in dispute (if not already deposited), in addition to the amount previously deposited under Sub-Section (6) of Section 107 of the BGST Act, the petitioner must be extended the statutory benefit of stay. Consequently, the recovery of the balance amount and any steps taken in that regard were deemed to be stayed. The Court also held that this stay cannot be open-ended. The petitioner would be required to present/file their appeal under Section 112 of the BGST Act once the Tribunal is constituted and made 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. The Court explicitly 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 can be deprived of the statutory benefit of stay under Section 112(9) of the BGST Act due to the non-constitution of the Appellate Tribunal by the respondents? The petitioner argued that they are entitled to the benefit of stay upon depositing the prescribed amount, as they are being prevented from availing their statutory remedy by the inaction of the respondents in constituting the Tribunal. They contended that the recovery of the balance amount should be stayed. The State acknowledged the non-constitution of the Tribunal and had issued a notification regarding the commencement of the limitation period. The Court had to decide if the petitioner should be granted the stay despite the Tribunal not being functional. The petitioner relied on a previous order of the High Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.