M/S Ravi Kumar Ray vs. The State Of Bihar

Facts

The petitioner, M/s Ravi Kumar Ray, a proprietary concern, 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 (B.G.S.T.) Act. However, the Tribunal had not been constituted, preventing the petitioner from filing the 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 State authorities acknowledged this issue 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 constitution of the Tribunal and the President entering office. The petitioner sought directions from the High Court to address this procedural deadlock.

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 reasoned that it would be inequitable to penalize the petitioner for a procedural impediment created by the State. Therefore, 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 any amount deposited earlier under Sub-Section (6) of Section 107, the petitioner must be extended the statutory benefit of stay. The recovery of the balance amount and any steps taken in this regard would be deemed stayed. The Court also stipulated that this stay would 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 the appeal within the period specified upon the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. This relief was granted in line with a previous order 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 under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondents? (Question of law) Petitioner's Contention: The petitioner argued that they should not be prejudiced by the respondents' failure to constitute the Tribunal. They contended that they are entitled to the benefit of stay of recovery of the balance tax amount upon fulfilling the conditions stipulated in Section 112(8) of the B.G.S.T. Act, as they are prevented from filing their appeal solely due to the non-functional Tribunal. They relied on the principle that a litigant should not suffer due to administrative inaction. Revenue's Contention: The State 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 removal of difficulties. Their stance implicitly supported the petitioner's inability to file an appeal but did not explicitly argue against the petitioner's right to stay, given the circumstances. They did not present any argument against the petitioner's claim for stay.