Vihaan Networks Limited vs. The State Of Bihar

Facts

The petitioner, Vihaan Networks Limited, 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 Act (B.G.S.T. Act). However, the Tribunal had not been constituted, preventing the petitioner from filing an appeal and 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 respondent State authorities acknowledged the non-constitution of the Tribunal 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 period of limitation for appeal would commence only after the Tribunal's President entered office. The petitioner sought relief from the High Court due to this procedural impediment.

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, in addition to any amount already deposited 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. The recovery of the balance amount and any steps taken in this regard were deemed to be stayed. The Court also held that this relief could 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, observing statutory requirements. If the petitioner chose not to avail the remedy of appeal after the Tribunal's constitution, the respondents would be at liberty to proceed in accordance with law. The Court relied on a similar relief granted in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, upon depositing a specified portion of the disputed tax amount? The petitioner argued that they should not be deprived of the statutory remedy of stay due to the respondents' failure to constitute the Tribunal. They contended that the notification issued under Section 172 was a measure to remove difficulties and that the court should extend the benefit of stay. The revenue/State did not record any specific argument against this point, but their actions and the notification suggest a procedural approach to the issue.