Hind Stores vs. The State Of Bihar

Facts

Hind Stores, a proprietary concern, 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 (B.G.S.T.) Act. The petitioner was unable to file an appeal due to the non-constitution of the Tribunal, which prevented them from obtaining a stay on the recovery of the balance tax amount as provided under Section 112(8) and (9) of the 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 President of the Tribunal entered office. The petitioner sought relief from the High Court to overcome this procedural hurdle.

Held

The Court held that the petitioner must 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 any amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act. The Court reasoned that the petitioner cannot be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. Consequently, the recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also opined that this stay cannot be open-ended. Therefore, the petitioner would be required to present their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. The ratio decidendi is that statutory benefits should not be denied to a litigant due to administrative delays or failures of the State in establishing statutory forums. The Court directed that if the petitioner does not avail the remedy of appeal within the period specified upon constitution of the Tribunal, the respondent authorities would be at liberty to proceed in accordance with law.

Key Issues

1. Whether the petitioner is entitled to 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 Appellate Tribunal, given that the respondents are responsible for this delay? (Question of law) Petitioner's Arguments: The petitioner argued that they should not be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the failure of the respondents to constitute the Tribunal. They contended that the non-constitution of the Tribunal is a fault of the State authorities, and the petitioner should not suffer because of it. They relied on the principle that a party should not be prejudiced by the inaction of the authorities. The petitioner also pointed out that similar relief had been granted by the Court in other cases. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or State respondents regarding this issue, other than their acknowledgment of the non-constitution of the Tribunal and the issuance of the removal of difficulties order.