Tax Dispute Resolved: 20% Deposit Required for Recovery Stay Until Tribunal Reconstitution and Appeal Filing

HC ruled that due to non-constitution of the Tribunal, the petitioner must deposit 20% of disputed tax to obtain stay of recovery. The Court directed petitioner to file appeal once Tribunal is constituted, with respondent authorities empowered to proceed if appeal is not filed within specified timeframe. The judgment ensures statutory remedy while protecting revenue interests.

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Issues:
Non-constitution of the Tribunal preventing the petitioner from availing statutory remedy of appeal and stay of recovery of tax.

Analysis:
The petitioner filed a writ petition seeking relief under Article 226 of the Constitution of India due to the non-constitution of the Tribunal, which deprived the petitioner of the statutory remedy of appeal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act). The petitioner was also unable to avail the benefit of stay of recovery of the balance amount of tax as per the provisions of Section 112 (8) and (9) of the B.G.S.T. Act.

The respondent State authorities acknowledged the non-constitution of the Tribunal and issued a notification to address the issue. The notification stated that the period of limitation for filing an appeal before the Tribunal under Section 112 would commence only after the President or State President of the Tribunal enters office post its constitution under Section 109 of the B.G.S.T. Act.

In its judgment, the Court directed that the petitioner must deposit a sum equal to 20 percent of the remaining tax amount in dispute to avail the statutory benefit of stay under Section 112 (9) of the B.G.S.T. Act. The Court emphasized that the petitioner should not be deprived of this benefit due to the non-constitution of the Tribunal by the respondents. The Court also highlighted a similar relief granted in a previous case.

Furthermore, the Court stated that the relief of stay, upon deposit of the statutory amount, cannot be indefinite. The petitioner was required 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 the Tribunal's constitution would allow the respondent authorities to proceed further in accordance with the law.

The Court disposed of the writ petition with the mentioned directions, observations, and liberty for the respondent authorities to take further action if the petitioner fails to file an appeal within the specified period upon the Tribunal's constitution.

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