M/S Kw And Jasim Traders vs. The State Of Bihar

Facts

The petitioner, M/s KW and Jasim Traders, filed a writ petition challenging an order dated 05.11.2022 passed by the Additional Commissioner of State Taxes (Appeal), Purnea Division, which held their appeal time-barred. This appeal was against an ex-parte order dated 08.01.2022 passed by the Assistant Commissioner of State Taxes, Forbesganj Circle, under Section 73(9) of the Bihar Goods and Service Tax Act, 2017. The petitioner also sought to quash the ex-parte order itself, arguing it was cryptic, nonspeaking, and violative of natural justice. The petitioner intended to file a further appeal before the Appellate Tribunal under Section 112 of the BGST Act but was unable to do so due to the non-constitution of the Tribunal. The State authorities had issued a notification (S.O. 399 dated 11.12.2019) under Section 172 of the BGST Act, stating that the limitation period for appeals to the Tribunal would commence only after the President entered office.

Held

The Court held that the petitioner could not be deprived of the statutory benefit of stay under Section 112(9) of the BGST Act due to the non-constitution of the Tribunal by the respondents. Consequently, the recovery of the balance amount and any steps taken for recovery were deemed to be stayed. This relief was made conditional upon the petitioner depositing 20 percent of the remaining disputed tax amount, in addition to any amount already deposited under Section 107(6) of the BGST Act. The Court also observed that this stay could not be open-ended. The petitioner was directed to file their appeal under Section 112 of the BGST Act once the Tribunal is constituted and functional. If the petitioner failed to file the appeal within the period specified upon 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 Bihar Goods and Services Tax Act, 2017, despite the non-constitution of the Appellate Tribunal, and if so, upon what conditions? 2. Whether the petitioner can be deprived of the statutory remedy of appeal before the Tribunal due to the respondents' failure to constitute it? Petitioner's Arguments: The petitioner contended that they were deprived of their statutory remedy of appeal before the Tribunal due to its non-constitution. They argued that this prevented them from availing the benefit of stay of recovery under Section 112(8) and (9) of the BGST Act upon depositing the prescribed amounts. They relied on the State's own notification (S.O. 399 dated 11.12.2019) which acknowledged the issue of limitation starting only after the Tribunal's constitution. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state respondents.