Deemed stay of GST recovery applies where appellate tribunal is not constituted and deposit conditions are met.

Where the appellate tribunal under the Bihar GST Act had not yet been constituted, the Court held that the assessee should not lose the statutory protection attached to the appellate remedy. The petitioner had already invoked the first appeal under Section 107 and claimed compliance with the deposit requirement for a further appeal under Section 112(8). In view of Section 112(9), which deems recovery of the balance demand stayed on payment of the prescribed amount, and the difficulty order recognising that limitation would run only after the Tribunal came into existence, the Court found a strong prima facie case and stayed recovery of the outstanding demand.

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Issues: Whether recovery of the balance tax demand could be stayed when the statutory appellate tribunal under the Bihar Goods and Services Tax Act, 2017 had not been constituted, and whether the petitioner's deposits satisfied the conditions for the deemed stay contemplated by the Act.

Analysis: The writ petition challenged the recovery notice issued towards the outstanding SGST demand. The petitioner had already pursued the statutory appellate remedy under Section 107 of the Bihar Goods and Services Tax Act, 2017 and asserted that it had made the deposits required for a further appeal under Section 112(8). The statutory scheme also provides in Section 112(9) that, once the prescribed amount is paid, recovery of the balance amount is deemed to remain stayed till disposal of the appeal. The difficulty arose because the Goods and Services Tax Appellate Tribunal had not been constituted under Section 109. The order issued under Section 172 of the Bihar Goods and Services Tax Act, 2017 for removal of difficulties was noticed as recognizing that limitation for a Section 112 appeal would run only after the Tribunal came into existence. In these circumstances, the Court found a strong prima facie case and held that the petitioner should not be deprived of the statutory protection attached to the appellate remedy merely because the Tribunal was not functioning.

Conclusion: The impugned recovery notice was stayed in favour of the petitioner.

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