M/S Sumit Kumar vs. The State Of Bihar

Facts

The petitioner, M/s Sumit Kumar, a proprietary concern, filed a writ petition before the Patna High Court seeking statutory remedies. The petitioner intended 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 Appellate Tribunal had not been constituted, preventing the petitioner from availing this statutory remedy and the consequential benefit of a stay on the recovery of the balance tax amount 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 filing an appeal would commence only after the President of the Tribunal entered office.

Held

The Court held that the petitioner is entitled to the statutory benefit of stay under Section 112(9) 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 Section 107(6) 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. Consequently, the recovery of the balance amount and any steps taken towards it were deemed to be stayed. The Court also directed that the petitioner must file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional, within a period to be specified upon its constitution, to avail further consideration. If the petitioner fails to file the appeal within the specified period after the Tribunal's constitution, the respondents 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 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, by depositing 20 percent of the remaining disputed tax amount? Petitioner's Argument: The petitioner contended that they are being deprived of their statutory remedy of appeal and the benefit of stay due to the respondents' failure to constitute the Appellate Tribunal. They argued that they should not be prejudiced by this administrative inaction and should be granted the stay upon fulfilling the deposit requirement as stipulated for availing the stay benefit under Section 112(8) and (9) of the B.G.S.T. Act. Revenue's Argument: The judgment records no specific argument from the respondent State authorities regarding this issue. However, their acknowledgment of the non-constitution of the Tribunal and the issuance of the removal of difficulties notification suggests an awareness of the situation.