Patna High Court Order Dt. 30 October 2023
In a recent landmark judgement dated October 30, 2023, the Patna High Court has ruled in favour of the petitioner, asserting that they cannot be denied their rightful benefits of stay under section 112 of Bihar Goods and Service Tax Act due to the failure of the respondents to constitute the Tribunal.
This significant ruling was made by a division bench comprising Chief Justice K. Vinod Chandran and Justice Rajiv Roy of Patna High Court.
The Court allowed the writ petition, filed under Article 226 of the Constitution of India, on the condition that the petitioner deposits an amount equivalent to 20% of the remaining disputed tax, in addition to any previously deposited funds under Sub Section (6) of Section 107 of the B.G.S.T. Act. As a result, the petitioner is entitled to the statutory benefit of a stay on the tax demand under Sub-Section (9) of Section 112 of the B.G.S.T. Act.
Background of the Case
This current writ petition in Patna High Court has been initiated under Article 226 of the Constitution of India, with the petitioner seeking a variety of remedies.
The primary objective of the petitioner is to exercise their statutory right to appeal the disputed order before the Appellate Tribunal, as outlined in Section 112 of the Bihar Goods and Services Tax Act. However, due to the Tribunal not being established, the petitioner finds themselves unable to access their statutory remedies as per Sub-Section (8) and Sub-Section (9) of Section 112 of the B.G.S.T. Act.
As a result, the petitioner is also unable to benefit from the provision for the stay of tax recovery under Section 112 (8) and (9) of the B.G.S.T Act, contingent upon making the required deposits specified in Sub-section (8) of Section 112.
The state authorities responsible for responding to this case have acknowledged the absence of the Tribunal and have issued a notification on December 11, 2019, in accordance with their powers under Section 172 of the B.G.S.T Act. This notification stipulates that the limitation period for filing an appeal before the Tribunal under Section 112 will commence only after the date on which the President or State President, as the case may be, of the Tribunal, assumes office following its constitution.
Ruling of the Patna High Court
The Patna High Court is inclined to resolve the current writ petition with the following terms:
Subject to depositing an amount equal to 20 percent of the remaining disputed tax, provided it hasn’t already been deposited, in addition to any prior deposits made under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner is entitled to the statutory benefit of a stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act.
As a result of this decision, any actions related to the recovery of the outstanding tax amount will be temporarily halted. It’s worth noting that a similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in C.W.J.C. No. 15465 of 2022.
However, the Patna High Court emphasizes that the relief of stay, based on the deposit of the statutory amount, cannot be unlimited. To maintain fairness, the Court deems it necessary for the petitioner to file their appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is established and operational, and the President or State President assumes office. The appeal should adhere to the statutory requirements upon the Tribunal’s existence to facilitate its consideration.
In the event that the petitioner chooses not to pursue the remedy of appeal by filing under Section 112 of the B.G.S.T. Act before the Tribunal within the specified period after its constitution, the respondent authorities will have the liberty to proceed further in accordance with the law.
Upon compliance with the aforementioned order and payment of an amount equivalent to 20 percent of the outstanding tax, any bank account attachment related to the tax demand will be lifted.
Conclusion
This case before the Patna High Court highlights the current challenges faced by the petitioners and underscores the significance of addressing the non-constitution of the Tribunal in order to ensure the petitioner’s access to their statutory rights and remedies. This decision marks a significant development in tax dispute resolution and upholds the petitioner’s rights and privileges. This ruling also ensures a balanced approach to addressing the petitioner’s concerns while also upholding the statutory framework.
Case Title: Cohesive Infrastructure Developers Pvt Ltd Vs CBIC & Ors; Case No: 15438/2023; Date of Order: 30 October 2023
To Access the Process of Appeals & Revision from official Site of CBIC CLICK HERE
To Read the recent ITAT Surat Ruling on Validity of Revision Order U.S.263 CLICK HERE
Also Read:
CBIC Notification 53/2023-CT: GST Amnesty Scheme to Appeal Against Orders Passed until 31 March 2023