Ujjain Engicon INDIA Private Limited vs. The State Of Bihar

Facts

The petitioner, Ujjain Engicon India Private Limited, filed a writ petition challenging an ex-parte order dated February 28, 2020, passed under Section 73 of the Goods and Services Tax Act, 2017. This order disallowed Input Tax Credit for the tax period January 2019 to March 2019, leading to a demand of Rs. 1,30,83,853.64. The petitioner also challenged the appellate order dated December 16, 2021, which rejected their appeal and affirmed the demand. Further, a consequential order dated January 7, 2023, under Section 79(1)(c) sought to recover Rs. 3,97,46,810.00 from third parties. The petitioner's primary grievance was the inability to file a statutory appeal before the Appellate Tribunal due to its non-constitution, thereby preventing them from availing the benefit of stay on recovery as provided under Section 112 of the Bihar Goods and Services Tax Act.

Held

The Court held that the petitioner cannot 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 respondent authorities. Following its decision in Angel Engicon Private Limited vs. the State of Bihar & Anr. (C.W.J.C No. 1920 of 2023), the Court directed that if the petitioner deposits 20 percent of the remaining amount of tax in dispute, in addition to any amount already deposited under Section 107(6) of the BGST Act, the recovery of the balance amount and any steps taken in that regard shall be deemed to be stayed. The Court also stipulated that the petitioner must file their appeal under Section 112 of the BGST Act once the Tribunal is constituted and functional. If the petitioner fails to file the appeal within the period specified after the Tribunal's constitution, the respondent authorities would be at liberty to proceed in accordance with law. The Court explicitly left undecided any issues related to the merits of the original order or the appellate order.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay on recovery of the balance amount of tax under Section 112(9) of the Bihar Goods and Services Tax Act, 2017, despite the non-constitution of the Appellate Tribunal? Petitioner's argument: The petitioner contended that they are deprived of their statutory remedy of appeal and the consequential benefit of stay under Section 112(8) and (9) of the BGST Act due to the non-constitution of the Tribunal by the respondent authorities. They argued that the period of limitation for appeal should commence only after the Tribunal is functional, as indicated by the State Tax authorities' notification (Order No. 09/2019-State Tax, S.O. 399, dated 11.12.2019) issued under Section 172 of the BGST Act. Revenue's argument: The judgment does not record any specific arguments from the revenue side regarding the issues raised by the petitioner, other than their acknowledgment of the non-constitution of the Tribunal.