2023 (4) TMI 586 - HC - GST

Maintainability of petition - availability of statutory remedy of appeal - non-constitution of the Tribunal (for which 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) - HELD THAT - 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. Reliance placed in the case of ANGEL ENGICON PRIVATE LIMITED VERSUS STATE OF BIHAR, ASSISTANT COMMISSIONER OF STATE TAX 2023 (3) TMI 879 - PATNA HIGH COURT where it was held 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. 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. In the instant case, this Court is of the opinion, that equities are required to be balanced. In the instant case, non-constitution of the Appellate Tribunal causing deprivation to the petitioner s statutory right to appeal under Section 112(8)(9) has to be viewed in the background of the fact that at least the amount, as contemplated under Section 112(8), i.e., 20 percent of the remaining tax in dispute is required to be deposited by the petitioner with due diligence, if he is genuinely desirous of availaing the remedy of appeal, which, in the opinion of this Court, would be within four(4) weeks. Application disposed off.

Summary

Issues involved:
The issues involved in the judgment include quashing of appellate order, challenge to order regarding Input Tax Credit (ITC), demand notice, arbitrary assessment order, stay of recovery proceedings, and determination of taxable value component for service tax liability.

Quashing of Appellate Order:
The petitioner sought to quash the appellate order dated 07.03.2023 passed by the Additional Commissioner State Tax, which dismissed the appeal without considering the grounds raised.

Challenge to ITC Order:
The petitioner challenged the order dated 22.06.2022 regarding the wrongly availed ITC amounting to Rs. 1,23,08,24,596 for Financial Year 2017-18, alleging non-compliance with Section 17(2) & 17(4) of the BGST Act, 2017.

Demand Notice Quashing:
The petitioner sought to quash the demand notice issued on 22.06.2022, amounting to Rs. 2,34,28,89,862, including interest and penalty, based on the disputed ITC.

Arbitrary Assessment Order:
The petitioner argued that the assessment order under Section 73(9) was arbitrary as it imposed a penalty under Section 50(3) beyond the scope of the Show-Cause Notice, instead of Section 50(1).

Stay of Recovery Proceedings:
The petitioner requested the court to direct the respondent not to initiate recovery proceedings until the constitution of the GST Appellate Tribunal, as the petitioner was willing to deposit the pre-deposit amount.

Determination of Taxable Value Component:
The petitioner contended that the remaining part of the premium amount should be considered a non-taxable value/component for calculating service tax liability, and hence, the ITC on that amount should not be reversed under Section 17(2) & 17(4) of the BGST Act, 2017.

Separate Judgment by the Court:
The court, in a separate judgment, directed the petitioner to deposit 20 percent of the remaining tax in dispute within four weeks to avail the statutory benefit of stay under Section 112(9) of the BGST Act, balancing the equities due to the non-constitution of the Tribunal. Failure to file an appeal within the specified period would allow the authorities to proceed further in accordance with the law.