M/S Naz Enterprises vs. The State Of Bihar

Facts

M/s Naz Enterprises, the petitioner, filed a writ petition challenging an order dated 28.11.2022 passed by the Additional Commissioner of State Taxes (Appeal), dismissing their appeal solely on grounds of delay without considering the merits. The petitioner also challenged an order dated 18.11.2021 passed by the Joint Commissioner and Assistant Commissioner under Section 73 of the Bihar Goods & Service Tax Act, 2017, which imposed a tax demand of Rs. 32,78,348/-, interest of Rs. 3,44,226/-, and penalty of Rs. 3,27,834/- for the period April 2020 to March 2021. The petitioner sought to set aside these orders and, in the alternative, to have their appeal remanded to the appellate authority with condonation of delay, attributing the delay to the COVID-19 pandemic.

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 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Sub-Section (6) of Section 107. 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. However, the Court also opined that this stay cannot be open-ended. For balancing equities, 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 made functional. If the petitioner does not avail this remedy within the period specified upon the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court explicitly noted that similar relief had been 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 a stay of recovery of the balance tax amount under Section 112(9) of the Bihar Goods and Services Tax Act, 2017, despite the non-constitution of the Appellate Tribunal? The petitioner argued that due to the non-constitution of the Tribunal, they are deprived of their statutory remedy of appeal and the benefit of stay of recovery upon depositing the prescribed amount under Section 112(8). They contended that the delay in filing the appeal before the appellate authority was due to the COVID-19 pandemic and should be condoned. The respondent State authorities acknowledged the non-constitution of the Tribunal and referred to a notification (Order No. 09/2019-State Tax, S. O. 399) which states that the period of limitation for preferring an appeal before the Tribunal shall start only after the President or State President enters office.