2023 (8) TMI 1121 - HC - GST

Petitioner gets statutory stay benefits after depositing 20% disputed tax under Section 112(9) despite Tribunal delays

The Patna HC disposed of a writ petition regarding tax recovery proceedings. The petitioner challenged the maintainability due to non-constitution of the ... Stay of recovery on deposit - non-constitution of appellate tribunal - statutory appeal under Section 112 of the B.G.S.T. Act - deposit of 20 percent as condition for interim relief - requirement to file appeal upon constitution of the TribunalStay of recovery on deposit - deposit of 20 percent as condition for interim relief - non-constitution of appellate tribunal - Petitioner entitled to statutory stay of recovery under Sub-Section (9) of Section 112 of the B.G.S.T. Act upon deposit of 20 percent of the remaining disputed tax (in addition to earlier deposit), by reason of non-constitution of the Tribunal. - HELD THAT: - The Court applied the principle that a taxpayer should not be deprived of the statutory benefit of stay merely because the State has not constituted the appellate Tribunal. Observing the State's own notification under Section 172 acknowledging non-constitution, the Court followed the reasoning adopted in Angel Engicon Private Limited and directed that, subject to verification of the deposit, the petitioner be extended the benefit of stay under Sub-Section (9) of Section 112. The stay was held to operate so that recovery of the balance amount and any steps taken for recovery shall be deemed stayed while the condition of deposit is satisfied. The Court also emphasised that the interim relief is granted because the Tribunal's non-constitution is attributable to the respondent-Authorities and cannot be visited upon the petitioner.Stay of recovery granted subject to deposit of 20 percent of the remaining disputed tax (in addition to earlier deposit); recovery and steps for recovery deemed stayed pending satisfaction/verification of that condition.Requirement to file appeal upon constitution of the Tribunal - statutory appeal under Section 112 of the B.G.S.T. Act - Petitioner must file the statutory appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and the President or State President enters office; failure to do so will permit the respondent-Authorities to proceed in accordance with law. - HELD THAT: - The Court balanced equities by making the interim stay contingent upon the petitioner pursuing the statutory remedy when the appellate forum becomes available. The stay was characterised as not open-ended; the petitioner was given liberty to present or file the appeal observing statutory requirements after constitution of the Tribunal, and warned that omission to file the appeal within any period to be specified upon constitution would leave the respondents free to resume action.Petitioner required to file appeal under Section 112 after constitution of the Tribunal; absence of such appeal within the specified period permits respondents to proceed.Verification of deposit - stay of recovery on deposit - Verification of the petitioner's deposit of the 20 percent sum was directed before conferring the stay benefit. - HELD THAT: - The Court recorded the petitioner's assertion of having deposited the 20 percent sum and directed that the fact of such deposit be verified. The grant of the statutory stay was made explicitly 'subject to verification' of the additional deposit (or its deposit if not already made), thereby remanding the limited factual question of payment/verification to the competent authority for confirmation before the stay operates.Verification of the 20 percent deposit to be carried out; stay benefit to be extended only upon such verification (or upon deposit if not already made).Final Conclusion: Writ petition disposed of by granting interim stay of recovery (subject to verification/deposit of 20 percent in addition to earlier deposit), with direction that the petitioner must file the statutory appeal under Section 112 once the Tribunal is constituted; if no appeal is filed within the period to be specified upon constitution, respondents may proceed in accordance with law. Issues involved:The issues involved in the judgment are the quashing of orders, availability of statutory remedy of appeal, non-constitution of the Tribunal, benefit of stay of recovery of tax, and the liberty granted to the petitioner.Quashing of Orders:The petitioner sought writs to quash orders dated 18.07.2022 and 14.02.2020 passed by the respondents, which rejected the petitioner's appeal and demanded tax, interest, and penalty. The petitioner also requested a declaration regarding the exclusion of damage discount from the value of supply.Availability of Statutory Remedy of Appeal:The petitioner desired to appeal against the impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act. However, due to the non-constitution of the Tribunal, the petitioner was deprived of this statutory remedy and the benefit of stay of recovery of tax.Non-constitution of the Tribunal:The petitioner was prevented from availing the benefit of stay of recovery of tax due to the non-constitution of the Tribunal, as acknowledged by the respondent State authorities. A notification was issued to address the period of limitation for appealing before the Tribunal.Benefit of Stay of Recovery of Tax:The Court granted the petitioner the benefit of stay under Section 112 of the Bihar Goods and Services Tax Act upon depositing a sum equal to 20 percent of the remaining tax amount in dispute. The recovery of the balance amount was stayed due to the non-constitution of the Tribunal.Liberty Granted to the Petitioner:The petitioner was given the liberty to file an appeal under Section 112 of the Act once the Tribunal is constituted and functional. Failure to file an appeal within the specified period would allow the respondent authorities to proceed further in accordance with the law.This judgment addressed the issues of quashing orders, availability of statutory remedy of appeal, non-constitution of the Tribunal, benefit of stay of recovery of tax, and the liberty granted to the petitioner, providing detailed insights into each aspect for a comprehensive understanding.