M/S Gaya Electronics vs. The State Of Bihar

Facts

M/s Gaya Electronics, a proprietorship firm, filed a writ petition before the Patna High Court seeking to avail the statutory remedy of appeal against an order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the petitioner was unable to file the appeal due to the non-constitution of the Tribunal. This prevented them from availing the benefit of stay of recovery of the balance amount of tax as contemplated 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 (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 preferring an appeal would commence only after the President of the Tribunal entered office.

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 cannot 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 for it would be deemed stayed. The Court also held that this relief of stay cannot be open-ended. The petitioner would be required to present/file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. If the petitioner chooses not to avail the remedy of 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 granted 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? Petitioner's contention: The petitioner argued that they are being deprived of their statutory remedy of appeal and the consequential benefit of stay due to the failure of the respondents to constitute the Appellate Tribunal. They contended that they should not be penalized for a situation beyond their control and should be granted the stay upon fulfilling the deposit requirements. Revenue's contention: The respondent State authorities acknowledged the non-constitution of the Tribunal and had issued a notification to address the issue of limitation. While not explicitly stating an argument against the stay, their actions indicated an attempt to manage the situation arising from the Tribunal's non-existence.