2024 (4) TMI 755 - HC - GST

Taxpayer Wins Temporary Relief in GST Dispute, Ordered to Deposit 20% and Await Tribunal Constitution Under Section 109

HC granted relief to taxpayer challenging tax demand due to non-constitution of Appellate Tribunal under Bihar GST Act. Court ordered stay of recovery ... Maintainability of petition - availability of statutory remedy of appeal - non-constitution of the Tribunal - 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. The petition is disposed off 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. Issues involved:The issues involved in the judgment are the non-constitution of the Tribunal preventing the petitioner from availing statutory remedy of appeal and stay of recovery of tax under the Bihar Goods and Services Tax Act.Issue 1: Non-constitution of the TribunalThe petitioner sought relief under Article 226 of the Constitution of India to appeal against an impugned order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). However, due to the non-constitution of the Tribunal, the petitioner was deprived of the statutory remedy under Sub-Section (8) and Sub-Section (9) of Section 112 of the B.G.S.T. Act. The respondent State authorities acknowledged this fact and issued a notification to address the issue of limitation for preferring an appeal before the Tribunal only after its constitution. The Court ordered that the petitioner be extended the benefit of stay under Sub-Section (9) of Section 112 upon deposit of a sum equal to 20 percent of the remaining tax amount in dispute.Issue 2: Statutory relief of stay and appeal filing requirementsThe Court ruled that the statutory relief of stay, upon deposit of the required amount, cannot be open-ended. The petitioner was directed to file an appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional. Failure to file the appeal within the specified period upon Tribunal constitution would allow the respondent authorities to proceed further in the matter. Additionally, if the order was complied with and the required sum was paid, any bank account attachment pursuant to the demand would be released.Separate Judgment by Judges:There is no separate judgment delivered by the judges in this case.This judgment addressed the issues arising from the non-constitution of the Tribunal under the Bihar Goods and Services Tax Act, which deprived the petitioner of the statutory remedy of appeal and stay of recovery of tax. The Court provided specific directions for the petitioner to avail the statutory benefits upon depositing the required amount and filing an appeal once the Tribunal is constituted. The judgment balanced the equities by ensuring compliance with statutory requirements while allowing the respondent authorities to proceed if the petitioner failed to file the appeal within the specified period.