2023 (8) TMI 169 - HC - GST

Validity of assessment order - rectification of order - Maintainability of petition - availability of alternative remedy of appeal - non-constitution of the Tribunal - HELD THAT - The assessment order indicated that the tax was assessed on the basis of the deductions made by the Executive Engineer, Road Division and paid to the Department, on behalf of the petitioner, as TDS. The allegation was that the works on which the tax was deducted was not disclosed by the petitioner in the returns filed - assessment order was challenged in appeal which also was dismissed. In fact, the specific contention of the appellant-petitioner that deductions of another concern have been made and shown in the account of the petitioner, was specifically rejected by the Tribunal. The Tribunal also noticed that there was absolutely no evidence produced to substantiate the contention. The learned Government Advocate brings notice to Section 39 of the GST Act, which also prohibits the petitioner to make a rectification of the error, if any, caused. In any event, the appeal having been dismissed on facts, the jurisdiction under Article 226 of the Constitution need not be invoked, however, the petitioner essentially has a statutory remedy of appeal against the impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act - However, 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. Petition disposed off subject to conditions imposed - petitioner directed t o 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. Petition disposed off.

Summary

Issues involved: Assessment based on deductions made by Executive Engineer, Road Division; Allegation of tax deduction not disclosed in returns; Statutory remedy of appeal before the Appellate Tribunal under B.G.S.T. Act; Non-constitution of Tribunal affecting statutory remedy; Stay of recovery of tax amount; Order for deposit of 20% of remaining tax amount for stay benefit; Requirement to file appeal once Tribunal is constituted; Liberty for authorities to proceed if appeal not filed.

The petitioner challenged the assessment order which was based on deductions made by the Executive Engineer, Road Division on behalf of the petitioner as TDS. The petitioner contended that the deductions were wrongly made on their behalf as there was another entity involved, Dayanand Prasad Sinha and Company, which was a separate concern.

The Tribunal dismissed the appeal against the assessment order, rejecting the petitioner's claim that deductions were made by another entity and not disclosed in their returns. The Tribunal emphasized the lack of evidence to support this contention, leading to the dismissal of the appeal.

The Court noted the provision of Section 39 of the GST Act, prohibiting rectification of errors by the petitioner. Despite the dismissal of the appeal on facts, the petitioner was informed of the statutory remedy of appeal before the Appellate Tribunal under the B.G.S.T. Act, Section 112.

Due to the non-constitution of the Tribunal, the petitioner was deprived of the statutory remedy under Section 112 of the B.G.S.T. Act, impacting their ability to avail the benefit of stay of tax recovery as per the Act.

Acknowledging the non-constitution of the Tribunal, the Court ordered the petitioner to deposit 20% of the remaining tax amount for the statutory benefit of stay, ensuring the recovery of the balance amount is stayed until the Tribunal is constituted.

The Court directed the petitioner to file an appeal under Section 112 of the B.G.S.T. Act once the Tribunal is functional, emphasizing the need to observe statutory requirements for the appeal to be considered.

If the petitioner fails to file an appeal within the specified period upon the Tribunal's constitution, the authorities were granted liberty to proceed further in accordance with the law, highlighting the importance of complying with the statutory process.

Upon compliance with the Court's order for deposit and payment, any bank account attachment related to the tax demand shall be released, providing relief to the petitioner in this regard.

With the above directions and observations, the writ petition was disposed of, ensuring the petitioner's rights and obligations are addressed in line with the statutory framework.