High Court Resolves Procedural Hurdles in Tax Recovery, Mandates 20% Deposit and Preserves Appellate Rights Under BGST Act

HC addressed a procedural issue arising from the non-constitution of the Tribunal under the B.G.S.T. Act. The court granted the petitioner a conditional stay of tax recovery by mandating a 20% deposit, with the right to appeal once the Tribunal is established. The ruling ensures statutory remedies are preserved despite administrative delays, providing a balanced approach to resolving tax dispute procedural constraints.

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Issues involved: Non-constitution of the Tribunal affecting statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act).

Summary:

The writ petition was filed under Article 226 of the Constitution of India seeking various reliefs, primarily the appeal against an impugned order before the Appellate Tribunal under Section 112 of the B.G.S.T. Act. However, due to the non-constitution of the Tribunal, the petitioner was deprived of the statutory remedy under Sub-Sections (8) and (9) of Section 112 of the B.G.S.T. Act, which also prevented the petitioner from availing the benefit of stay of recovery of the balance amount of tax. The respondent State authorities acknowledged this issue and issued a notification for removal of difficulties, stating that the period of limitation for appealing before the Tribunal shall start after the Tribunal's constitution.

The Court decided to dispose of the writ petition by providing the following terms:
(i) The petitioner must be granted the benefit of stay under Sub-Section (9) of Section 112 upon depositing a sum equal to 20 percent of the remaining tax amount in dispute, in addition to any earlier deposits made. This stay benefit cannot be denied due to the non-constitution of the Tribunal.
(ii) The stay relief, however, cannot be open-ended. The petitioner will be required to file an appeal under Section 112 once the Tribunal is constituted and functional. The appeal must adhere to statutory requirements for consideration.
(iii) If the petitioner chooses not to file an appeal within the specified period after the Tribunal's constitution, the respondent authorities can proceed further in accordance with the law.

The writ petition was disposed of with these directions and observations, granting the petitioner relief in light of the non-constitution of the Tribunal.

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