M/S Kiraye Baba Construction Private Limited vs. The State Of Bihar

Facts

M/s Kiraye Baba Construction Private Limited (the petitioner) filed a writ petition challenging orders passed by the Assistant Commissioner and the Joint Commissioner (Appeal) of State Taxes. The impugned orders imposed tax, interest, and penalty totaling Rs. 4,67,126.40 and Rs. 467126/- by the Assistant Commissioner, and penalty and interest of Rs. 3,96,964.28 and Rs. 4,24,423.14/- for July 2019 by the Joint Commissioner (Appeal). The petitioner sought to set aside these demands and prevent recovery. The primary grievance was the inability to avail the statutory remedy of appeal before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act due to its non-constitution. The petitioner was thus prevented from obtaining a stay on recovery by depositing a portion of the disputed amount as stipulated in Section 112(8) and (9). The State authorities acknowledged the non-constitution of the Tribunal and issued a notification regarding the period of limitation for appeals.

Held

The Court held that the petitioner should be extended 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). The Court reasoned that the petitioner cannot be deprived of this benefit due to the non-constitution of the Tribunal, which is the responsibility of the respondents. The recovery of the balance amount and any steps taken towards it were deemed to be stayed. The Court also held that this stay cannot be open-ended. To balance equities, the petitioner would be required to file their appeal under Section 112 once the Tribunal is constituted and becomes functional. If the petitioner fails to file an appeal within the period specified 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 Bihar Goods and Services Tax Act, despite the non-constitution of the Appellate Tribunal, to prevent recovery of the disputed tax amount? 2. If a stay is granted, what should be the duration or conditions attached to it, considering the non-constitution of the Tribunal by the respondents? Petitioner's Arguments: The petitioner argued that they are being deprived of their statutory right to appeal and obtain a stay on recovery due to the respondents' failure to constitute the Appellate Tribunal. They contended that they should not suffer due to this administrative lapse and should be granted the benefit of stay as provided under Section 112(8) and (9) upon depositing the stipulated pre-deposit. They relied on the principle that a litigant should not be prejudiced by the inaction of the authorities. Revenue's Arguments: The judgment does not record specific arguments from the revenue or state respondents regarding the issues raised by the petitioner. However, the respondents acknowledged the non-constitution of the Tribunal and issued a notification concerning the period of limitation.