2023 (7) TMI 1541 - HC - GST

Maintainability of petition - availability of alternative remedy - entitlement to 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 - 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. 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. Petiiton disposed off.

2023 (3) TMI 1390 - HC

1. ISSUES PRESENTED and CONSIDERED

The core legal questions presented and considered in this judgment are as follows:

Whether the petitioner is entitled to the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act) despite the non-constitution of the Appellate Tribunal?
Whether the petitioner can be granted a stay on the recovery of the balance amount of tax in dispute due to the non-constitution of the Tribunal?
What are the implications of the non-constitution of the Tribunal on the statutory period of limitation for filing an appeal?
What conditions must the petitioner fulfill to avail the benefit of stay under the B.G.S.T. Act?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Statutory Remedy of Appeal

Relevant legal framework and precedents: The B.G.S.T. Act provides a statutory right to appeal to the Tribunal under Section 112. However, the Tribunal has not been constituted, preventing the petitioner from exercising this right.
Court's interpretation and reasoning: The court acknowledged the petitioner's right to appeal and recognized the impediment caused by the non-constitution of the Tribunal.
Key evidence and findings: The court noted the notification issued by the respondent State authorities, which acknowledged the non-constitution of the Tribunal and extended the limitation period for filing an appeal.
Application of law to facts: The court applied the provisions of the B.G.S.T. Act and the notification to determine that the petitioner's right to appeal should not be hindered by the non-constitution of the Tribunal.
Treatment of competing arguments: The court considered the State's acknowledgment of the issue and the necessity to balance the petitioner's rights with procedural requirements.
Conclusions: The petitioner is entitled to file an appeal once the Tribunal is constituted, and the limitation period will commence from the date the Tribunal becomes functional.

Issue 2: Grant of Stay on Recovery of Balance Tax

Relevant legal framework and precedents: Section 112(8) and (9) of the B.G.S.T. Act provide for a stay on recovery upon deposit of a specified amount.
Court's interpretation and reasoning: The court reasoned that the petitioner should not be deprived of the stay benefit due to the State's failure to constitute the Tribunal.
Key evidence and findings: The court referenced a similar relief granted in a previous case, indicating consistency in its approach.
Application of law to facts: The court applied the statutory provisions to grant a stay on recovery, subject to the deposit of 20% of the disputed tax amount.
Treatment of competing arguments: The court balanced the equities by imposing conditions on the stay, ensuring it is not open-ended.
Conclusions: The stay on recovery is granted, contingent upon the petitioner depositing the required amount and filing an appeal once the Tribunal is constituted.

Issue 3: Implications of Non-Constitution of the Tribunal on Limitation Period

Relevant legal framework and precedents: The notification issued under Section 172 of the B.G.S.T. Act addresses the limitation period for appeals.
Court's interpretation and reasoning: The court interpreted the notification to mean that the limitation period will start only after the Tribunal is constituted.
Key evidence and findings: The notification itself served as key evidence, and the court relied on it to support its decision.
Application of law to facts: The court applied the notification to ensure that the petitioner's right to appeal is preserved.
Treatment of competing arguments: The court did not face significant opposition on this point, as the State had already issued the notification.
Conclusions: The limitation period for filing an appeal will commence upon the Tribunal's constitution, protecting the petitioner's right to appeal.

Issue 4: Conditions for Availing Stay Benefit

Relevant legal framework and precedents: Section 112(9) of the B.G.S.T. Act outlines the conditions for stay.
Court's interpretation and reasoning: The court emphasized the need for the petitioner to deposit 20% of the disputed tax amount to avail the stay benefit.
Key evidence and findings: The court found that similar conditions were imposed in previous cases, supporting its decision.
Application of law to facts: The court applied the statutory requirement for deposit to ensure compliance with the B.G.S.T. Act.
Treatment of competing arguments: The court balanced the petitioner's need for relief with the State's interest in tax recovery.
Conclusions: The petitioner must deposit 20% of the disputed tax to obtain a stay on recovery, and any bank account attachment will be released upon compliance.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The petitioner cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves."
Core principles established: The right to appeal cannot be nullified by administrative delays in constituting the Tribunal. Equitable relief must be balanced with statutory compliance.
Final determinations on each issue: The petitioner is entitled to a stay on recovery, subject to depositing 20% of the disputed tax. The limitation period for appeal will start upon the

← Previous Next →