Angel Engicon Private Limited vs. The State Of Bihar

Facts

The petitioner, Angel Engicon Private Limited, challenged an order dated 08.06.2022 passed by the Additional Commissioner of State Tax (Appeal), Patna West, Patna, which rejected their appeal against an assessment order. The petitioner argued that they were deprived of their statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax (B.G.S.T.) Act and the consequential benefit of a stay on recovery proceedings under Section 112(8) and 112(9) due to the non-constitution of the Appellate Tribunal. The State of Bihar had issued a notification dated 11.12.2019 under Section 172 of the B.G.S.T. Act to address difficulties, clarifying that the limitation period for appeal would commence only after the constitution of the Tribunal and the President or State President entering office.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Section 112(9) of the B.G.S.T. Act due to the non-constitution of the Tribunal by the respondents. The Court directed that if the petitioner deposits 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 recovery of the balance amount shall be deemed to be stayed. The Court clarified that this stay is not open-ended and the petitioner would be required to file their appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. The respondents would be at liberty to proceed if the petitioner does not avail the remedy of appeal within the specified period after the Tribunal's constitution. The ratio is that a litigant cannot be prejudiced by the administrative failure to constitute a statutory forum, and interim relief should be granted to preserve rights until the forum becomes functional.

Key Issues

1. Whether the petitioner is entitled to the statutory benefit of stay of recovery proceedings under Section 112(8) and 112(9) of the B.G.S.T. Act, despite the non-constitution of the Appellate Tribunal? Petitioner's argument: The petitioner contended that due to the non-constitution of the Tribunal, they are unable to avail their statutory remedy of appeal and the benefit of a stay on recovery, as stipulated in Section 112(8) and 112(9) of the B.G.S.T. Act. They argued that they are being prevented from exercising their legal rights by the respondents' failure to constitute the Tribunal. They are desirous of availing the statutory remedy and the stay benefit. Revenue's argument: The judgment does not record any specific arguments made by the respondent revenue.