Patna High Court Upholds Petitioner's Rights in Absence of Appellate Tribunal
The Patna High Court has recently ruled in favour of M/s Cohesive Infrastructure Developers Pvt. Ltd, granting them relief in a Goods and Services Tax (GST) dispute.
The division bench comprising Chief Justice K. Vinod Chandran and Justice Rajiv Roy adjudicated in favour of the petitioner in a writ petition filed under Article 226 of the Constitution of India.
The petitioner primarily sought to exercise their statutory right to appeal the impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (BGST Act).
The absence of a constituted Appellate Tribunal effectively denied the petitioner their statutory right to appeal under Sub-Section (8) and Sub-Section (9) of Section 112 of the BGST Act.
The petitioner was further deprived of the benefit of staying the recovery of the remaining tax amount under Section 112 (8) and (9) of the BGST Act, despite depositing the required amount as per Sub-section (8) of Section 112, due to the absence of the Appellate Tribunal.
The respondent State authorities recognised the absence of a constituted Appellate Tribunal and issued a notification (Order No. 09/2019-State Tax, S. O. 399, dated December 11, 2019) to address this issue.
Exercising their powers under Section 172 of the BGST Act, they established that the time limit for filing an appeal before the Tribunal under Section 112 shall only commence upon the assumption of office by the President or the State President of the Tribunal, as the case may be, following its constitution under Section 109 of the BGST Act.
Acknowledging that the petitioner should not be penalised for the respondent's failure to establish the Appellate Tribunal, the Court directed that upon depositing an additional sum equal to 20 per cent of the remaining disputed tax amount, or the full amount if not already partially deposited, along with the previously deposited amount under Sub-Section (6) of Section 107 of the BGST Act, the petitioner shall be granted the statutory stay provision outlined in Sub-Section (9) of Section 112 of the BGST Act.
The Court stated that the petitioner's right to this benefit cannot be abrogated due to the respondent's inaction in constituting the Tribunal. Consequently, the recovery of the outstanding tax amount, along with any related actions taken, shall be considered stayed. It is noteworthy that this Court has granted similar relief in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in C.W.J.C. No. 15465 of 2022.
The Court further ruled that the statutory stay granted upon deposit of the requisite amount is not indefinite. To ensure fairness, the Court determined that since the order is being issued due to the respondent authorities' failure to establish the Appellate Tribunal, the petitioner will be obligated to present or file their appeal under Section 112 of the BGST Act once the Tribunal is duly constituted and operational, and the President or State President assumes office. The appeal must adhere to the statutory requirements upon the Tribunal's establishment to facilitate its timely consideration.
The Court determined that if the petitioner chooses not to exercise their right to appeal under Section 112 of the BGST Act before the Tribunal within the prescribed timeframe, the respondent authorities are permitted to proceed with further actions in accordance with the law.
Furthermore, the Court directed that if the petitioner adheres to the aforementioned order by depositing an amount equal to 20 per cent of the remaining disputed tax amount, any bank account attachment initiated in response to the demand shall be revoked.
Having considered the arguments and issued the necessary directions, the Patna High Court disposed of the writ petition.