M/S Shashank Auto Private Limited vs. The State Of Bihar

Facts

M/s Shashank Auto Private Limited (Petitioner) filed a writ petition before the Patna High Court challenging an order dated 15.12.2022 and a demand order dated 19.12.2022 passed by the Additional Commissioner, State Taxes, imposing tax, penalty, and interest. The Petitioner sought to set aside these orders and prevent recovery of the tax amount. The Petitioner wished to file an appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act. However, the Tribunal was not constituted, preventing the Petitioner from availing this statutory remedy and the associated benefit of stay of recovery upon depositing a portion of the disputed amount as per 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) under Section 172 of the B.G.S.T. Act, stating that the limitation period for appeal would commence after the Tribunal's President entered office.

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 directed that, 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 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 to be stayed. The Court noted that similar relief had been granted in another case. However, the Court also opined that this stay cannot be open-ended. Therefore, 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 respondents would be at liberty to proceed in accordance with law. No issue was expressly left undecided.

Key Issues

1. Whether the Petitioner is entitled to the statutory benefit of stay of recovery under Section 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal, and if so, on what conditions? 2. Whether the Petitioner can be deprived of the statutory remedy of appeal and the consequential stay of recovery due to the respondents' failure to constitute the Tribunal? Petitioner's Arguments: The Petitioner argued that they are being deprived of their statutory right to appeal and the benefit of a stay on recovery due to the non-constitution of the Tribunal by the respondents. They contended that this situation prevents them from availing the relief provided under Section 112(8) and (9) of the B.G.S.T. Act, which allows for a stay upon depositing a specified amount. Revenue/State's Arguments: The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification under Section 172 of the B.G.S.T. Act to address the delay in the limitation period for filing appeals. They did not present any argument against the Petitioner's claim for relief due to the non-constitution of the Tribunal.