2024 (12) TMI 1489 - HC - GST

Maintainability of petition - availability of alternative remedy - non-constitution of the Tribunal - 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. Petition disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The judgment primarily revolves around the following legal issues:

• Whether the petitioner can be deprived of the statutory remedy of appeal due to the non-constitution of the Appellate Tribunal under the Bihar Goods and Services Tax Act (B.G.S.T. Act).
• Whether the petitioner is entitled to a stay of recovery of the balance tax amount in the absence of an operational Tribunal.
• What interim reliefs are appropriate given the current circumstances?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Availability of Statutory Remedy of Appeal

• Relevant legal framework and precedents: The B.G.S.T. Act, specifically Section 112, provides for an appeal to the Appellate Tribunal. However, due to the non-constitution of the Tribunal, this remedy is currently unavailable.
• Court's interpretation and reasoning: The court noted that the non-constitution of the Tribunal should not disadvantage the petitioner, as this is a failure on the part of the state authorities.
• Key evidence and findings: The court referenced a notification that delays the start of the limitation period for filing an appeal until the Tribunal is constituted.
• Application of law to facts: The court applied the provisions of the B.G.S.T. Act to determine that the petitioner should not be penalized for the state's inability to constitute the Tribunal.
• Treatment of competing arguments: The court balanced the need for statutory compliance with the practical difficulties faced by the petitioner due to the Tribunal's non-constitution.
• Conclusions: The court concluded that the petitioner should be allowed to file an appeal once the Tribunal is constituted and should not suffer due to the delay.

Issue 2: Entitlement to Stay of Recovery

• Relevant legal framework and precedents: Section 112(8) and (9) of the B.G.S.T. Act outline the conditions for a stay of recovery upon appeal.
• Court's interpretation and reasoning: The court reasoned that the petitioner is entitled to a stay of recovery upon depositing 20% of the disputed tax amount, as the Tribunal's non-constitution is not the petitioner's fault.
• Key evidence and findings: The court acknowledged that similar relief had been granted in a previous case, indicating a consistent approach.
• Application of law to facts: The court applied the statutory provisions to grant an interim stay, subject to the deposit conditions.
• Treatment of competing arguments: The court considered the state's position but emphasized fairness to the petitioner.
• Conclusions: The court concluded that the stay of recovery is justified and necessary to prevent undue hardship to the petitioner.

Issue 3: Interim Reliefs

• Relevant legal framework and precedents: The court referenced its inherent powers to grant interim reliefs in the absence of a constituted Tribunal.
• Court's interpretation and reasoning: The court emphasized the need to balance equities and protect the petitioner's rights while ensuring compliance with statutory obligations once the Tribunal is operational.
• Key evidence and findings: The court noted that the petitioner had already satisfied a portion of the tax demand, which influenced the interim relief granted.
• Application of law to facts: The court applied equitable principles to grant interim reliefs, ensuring that the petitioner is not unduly burdened.
• Treatment of competing arguments: The court addressed the state's concerns by stipulating conditions for the interim stay.
• Conclusions: The court concluded that interim reliefs are appropriate, subject to specific conditions to ensure fairness and 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 judgment establishes that administrative delays in constituting statutory bodies should not prejudice the rights of individuals seeking legal remedies.
• Final determinations on each issue: The court determined that the petitioner is entitled to file an appeal once the Tribunal is constituted and is entitled to a stay of recovery upon fulfilling the deposit conditions.

The judgment effectively balances the statutory rights of the petitioner with the practical challenges posed by the non-constitution of the Tribunal, ensuring that the petitioner is not unfairly disadvantaged while maintaining compliance with legal requirements once the Tribunal becomes operational.