Wednesday, February 28, 2024

Petitioner cannot be deprived of the benefit, due to non- constitution of the Appellate Tribunal under Bihar Goods and Services Tax Act: Chief Justice Vinod Chandran

In Civil Writ Jurisdiction Case No. 2181 of 2023 (Amit Kumar Singh v. Union of India), the Patna High Court's bench of Chief Justice K. Vinod Chandran and Justice Harish Kumar, the petitioner was desirous of availing statutory remedy of appeal against the impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax (BGST) Act, 2017. But  due to non-constitution of the Tribunal, the petitioner is deprived of his statutory remedy under Sub-Section (8) and Sub-Section (9) of Section 112 of the BGST Act. As a consequence,  the petitioner was also prevented from availing the benefit of stay of recovery of balance amount of tax in terms of Section 112 (8) and (9) of the BGST Act upon deposit of the amounts as contemplated under Sub-section (8) of Section 112. The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office. Department of Commercial Taxes, Government is primarily responsible for Tax administration under B.G.S.T Act. So far this law has been amended twice in 2021 and 2023.

On April 6, 2023, the High Court's order disposed of the writ petition in the following terms:- 

(i) Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already
deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T.
Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112
of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. v. The State of Bihar in C.W.J.C. No. 15465 of 2022.

(ii) The statutory relief of stay, on deposit of the statutory amount, however in the opinion of this Court, cannot be open ended. For balancing the equities, therefore, the Court is of the opinion that since order is being passed due to non-constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter office. The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal.

(iii) In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under Section
112 of the B.G.S.T. Act before the Tribunal within the period which may be specified upon constitution of
the Tribunal, the respondent- Authorities would be at liberty to proceed further in the matter, in accordance with law.

The order was authored by Justice Vinod Chandran.

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