2023 (3) TMI 1359 - HC - GST

Maintainability of petition - availability of statutory remedy of appeal - non-constitution of Tribunal - recovery of transitional credit - deduction of tax under Section 41 of the BVAT Act and carried forward under the VAT return - transitional to GST regime - HELD THAT - 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 B.G.S.T. Act. Under the circumstances, the petitioner is 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 B.G.S.T 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. This Court in the case of Angel Engicon Private Limited vs. the State of Bihar Anr. 2023 (3) TMI 879 - PATNA HIGH COURT has disposed of the writ petition with certain observations and directions, allowing certain liberty to the petitioner, holding that 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. There is an additional fact in the instant case, as asserted by the petitioner, that in terms of the liberty granted under earlier order dated 09.12.2022, in these proceedings, he has already deposited 20 percent of the remaining amount of tax in dispute. Subject to verification of the fact of deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, or deposit of the same, 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, for he 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. The instant writ petition disposed off subject to conditions imposed.

Summary

Issues involved:
The issues involved in this case include seeking relief through a writ petition under Article 226 of the Constitution of India, challenging the validity and legality of various orders related to GST, transitional credit, recovery notices, and coercive actions. The petitioner also seeks clarification and direction on the transition of tax credits under different Acts to the GST regime.

Validity and legality of orders:
The petitioner filed a writ petition seeking to quash and set aside impugned orders-in-appeal, order-in-original, and recovery notice related to GST. The petitioner challenges the validity and legality of these orders and seeks relief through appropriate writs or directions under Article 226 of the Constitution of India.

Transition of tax credits to GST regime:
The petitioner requests the court to read down the provisions of Section 140(1) to allow the transition of tax credits deducted under a previous Act to the GST regime. Specifically, the petitioner seeks clarification that tax deducted under Section 41 of the BVAT Act and carried forward under the VAT return can be transitioned to the GST regime.

Availment of transitional credit:
The petitioner asserts that they have correctly availed transitional credit of tax deducted under Section 41 of the BVAT Act. The petitioner seeks a writ of certiorari or mandamus to confirm the correct availing of transitional credit and prevent any coercive action or recovery based on the impugned orders.

Stay of recovery and coercive actions:
The petitioner requests a writ of mandamus to direct the respondents not to initiate any coercive action or recovery of transitional credit, interest, and penalty based on the impugned orders. The petitioner seeks a stay on any such actions pending the disposal of the petition to safeguard their interests.

Statutory remedy of appeal and non-constitution of Tribunal:
Due to the non-constitution of the Tribunal, the petitioner is deprived of the statutory remedy of appeal under the Bihar Goods and Services Tax Act. The court acknowledges this issue and provides directions to ensure the petitioner's rights are protected, including the deposit of a specific amount for the benefit of stay on recovery.

Disposition of the writ petition:
The court disposes of the writ petition with certain observations and directions, emphasizing the need for the petitioner to file an appeal once the Tribunal is constituted and functional. The court provides specific terms for extending the statutory benefit of stay on recovery and outlines the consequences of not availing the remedy of appeal within the specified period.

Additional facts and disposition:
The court notes the petitioner's compliance with earlier orders regarding the deposit of a specific amount. Based on this compliance, the court further extends the statutory benefit of stay on recovery and outlines the necessary steps for the petitioner to avail the remedy of appeal once the Tribunal is operational. The writ petition is disposed of with specific terms and directions for the petitioner's benefit.