2023 (10) TMI 1488 - 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.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the petitioner is entitled to a stay of recovery of the balance amount of tax due to the non-constitution of the Appellate Tribunal under the Bihar Goods and Services Tax Act (B.G.S.T. Act).
• What interim reliefs can be granted to the petitioner in the absence of a functional Tribunal?
• How should the statutory requirements be balanced in light of the non-constitution of the Tribunal?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Stay of Recovery

• Relevant legal framework and precedents: The petitioner sought relief under Section 112 of the B.G.S.T. Act, which provides for an appeal to the Tribunal. Sub-sections (8) and (9) of Section 112 outline the conditions for a stay of recovery upon the deposit of certain tax amounts. The precedent case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar was referenced, where similar relief was granted.
• Court's interpretation and reasoning: The Court acknowledged the petitioner's inability to appeal due to the non-constitution of the Tribunal. It reasoned that the petitioner should not be deprived of the statutory benefit of a stay because the Tribunal was not constituted by the authorities.
• Key evidence and findings: The respondent State authorities admitted the non-constitution of the Tribunal and issued a notification to address the limitation period for filing an appeal, which would commence only after the Tribunal's President assumes office.
• Application of law to facts: The Court applied the provisions of the B.G.S.T. Act, particularly Section 112, to the factual scenario where the Tribunal was not yet functional, thereby justifying the grant of interim relief to the petitioner.
• Treatment of competing arguments: The Court balanced the equities by requiring the petitioner to deposit 20% of the disputed tax amount to avail the stay, ensuring that the relief was not open-ended and contingent upon the future constitution of the Tribunal.
• Conclusions: The petitioner is entitled to a stay of recovery of the balance tax amount upon depositing the specified amount, pending the constitution of the Tribunal.

Issue 2: Interim Reliefs in Absence of Tribunal

• Relevant legal framework and precedents: The Court considered the statutory provisions of the B.G.S.T. Act and the notification issued by the State authorities regarding the limitation period for filing an appeal.
• Court's interpretation and reasoning: The Court emphasized that the relief of stay should not be indefinite and must be subject to the petitioner's compliance with the statutory requirements once the Tribunal is constituted.
• Key evidence and findings: The Court noted the notification by the State authorities that the limitation period for appeals would start only after the Tribunal's President takes office, thereby acknowledging the procedural gap.
• Application of law to facts: The Court applied the law by granting a conditional stay, requiring the petitioner to file an appeal once the Tribunal is operational, thus ensuring compliance with statutory processes.
• Treatment of competing arguments: The Court balanced the need for interim relief with the requirement for eventual statutory compliance by setting conditions for the stay and future appeal filing.
• Conclusions: The petitioner is granted interim relief with conditions to file an appeal once the Tribunal is constituted, preventing indefinite relief.

3. SIGNIFICANT HOLDINGS

• 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." This statement underscores the Court's rationale for granting interim relief.
• Core principles established: The Court established that statutory benefits should not be denied due to administrative delays in constituting a Tribunal. It also emphasized the need for balancing interim relief with future statutory compliance.
• Final determinations on each issue: The Court determined that the petitioner is entitled to a stay of recovery upon depositing 20% of the disputed tax amount and must file an appeal once the Tribunal is constituted. The petitioner's bank account, if attached, should be released upon compliance with the order.