M/S Mahamaya Medical And General Store vs. State Of Chhattisgarh

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Section 112(9) of the Chhattisgarh Goods and Service Tax Act, 2017, due to the non-constitution of the Tribunal. Following the precedents set by the Patna and Bombay High Courts, the Court directed that the petitioner shall deposit 20% of the liability imposed by the impugned order dated July 12, 2022. The petitioner must file their appeal before the Goods and Service Tax Appellate Tribunal within 30 days from the date of the order. The statutory stay under Section 112(9) will remain in operation until the appeal is decided on its merits after the Tribunal's president or state president enters office. If the appeal is not filed within the prescribed period, the State would be at liberty to proceed with recovery. The ratio decidendi is that the inability to access a statutory remedy due to administrative inaction should not prejudice the assessee, and appropriate directions should be issued to balance equities.

Facts

The petitioner, M/s Mahamaya Medical and General Store, challenged an order dated July 12, 2022, passed by the Joint Commissioner (Appeals) (SGST), State Tax, Bilaspur. This order partly allowed the petitioner's first appeal against a demand order dated July 28, 2021, issued by the Assistant Commissioner State Tax, Korba. The original demand order imposed tax, interest, and penalty for the period April 2019 to March 2020. The petitioner sought to set aside the appellate order and allow their appeal in full, quashing the demand and allowing their Input Tax Credit claim. The writ petition was filed because the Goods and Service Tax Appellate Tribunal, though notified in Chhattisgarh, had not yet had its president or members appointed, preventing the filing of a second appeal under Section 112 of the Act of 2017.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(9) of the Chhattisgarh Goods and Service Tax Act, 2017, due to the non-constitution of the Goods and Service Tax Appellate Tribunal? Petitioner's arguments: The petitioner contended that similar issues have been addressed by other High Courts, such as the Patna High Court in M/s Cohesive Infrastructure Developers Pvt. Ltd. vs. The Central Board of Indirect Taxes and others and the Bombay High Court in Rochem India Pvt. Ltd. Vs. The Union of India and others. They argued that a notification dated December 5, 2019, extended the period of limitation in light of the Tribunal's non-constitution. Therefore, the Court should permit the petitioner to file an appeal once the Tribunal is functional. Revenue/State's arguments: The State/Respondents did not dispute the petitioner's preposition.