M/S Greentech Auto LLP vs. The State Of Bihar

Facts

M/s Greentech Auto LLP (the petitioner) filed a writ petition seeking to avail the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act before the Appellate Tribunal. However, the Tribunal was not 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 the non-constitution of the Tribunal and issued a notification 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 entry of the President into office. The petitioner sought relief from the High Court due to this procedural impediment.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay of recovery of the balance tax amount under Section 112(8) and (9) of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondent authorities. The Court directed that subject to the petitioner depositing a sum equal to 20 percent of the remaining amount of tax in dispute (if not already deposited), in addition to any amount deposited earlier under Section 107(6) of the B.G.S.T. Act, the petitioner shall be extended the statutory benefit of stay. The recovery of the balance amount and any steps taken in this regard will be deemed to be stayed. The Court reasoned that this relief is necessary to balance equities and prevent prejudice to the petitioner due to administrative inaction. However, the Court clarified that this stay is not 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. The Court 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 of recovery of balance tax under Section 112(8) and (9) of the B.G.S.T. Act due to the non-constitution of the Appellate Tribunal by the respondent authorities? Petitioner's Argument: The petitioner argued that they are entitled to the statutory benefit of stay of recovery of the balance tax amount as provided under Section 112(8) and (9) of the B.G.S.T. Act. They contended that their inability to file an appeal and obtain this stay is solely due to the failure of the respondent authorities to constitute the Tribunal, and therefore, they should not be prejudiced by this delay. They relied on the principle that a party should not suffer due to the administrative inaction of the authorities. Revenue's Argument: 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 delay in the limitation period. While not explicitly arguing against the petitioner's right to relief, their actions indicated an acknowledgment of the procedural difficulty. The judgment notes that the respondent authorities acknowledged the non-constitution of the Tribunal.