Facts of the Case

The petitioner, Ritesh Infratech Private Limited, sought to avail the statutory remedy of appeal against an impugned tax order before the GST Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act, 2017 (BGST Act). Since the Tribunal had not been constituted, the petitioner was deprived of both the appellate remedy and the accompanying benefit of automatic stay of recovery of the balance disputed tax under Section 112(8) and (9) of the BGST Act upon deposit of the prescribed amount. The State respondents had themselves acknowledged non-constitution of the Tribunal and issued a removal-of-difficulties notification (Order No. 09/2019-State Tax dated 11.12.2019) clarifying that the limitation period for filing a Tribunal appeal would run only from the date the Tribunal's President enters office.

Issues Involved

  1. Whether a petitioner can be denied the statutory benefit of stay of recovery under Section 112(9) merely because the GST Appellate Tribunal has not been constituted.
  2. What terms should govern such interim relief pending constitution of the Tribunal, and what recourse remains if the petitioner ultimately does not pursue the appeal once the Tribunal is functional.

Petitioner's Arguments

  • The petitioner is desirous of availing the statutory appellate remedy under Section 112 of the BGST Act, but is deprived of it, along with the benefit of stay under Section 112(8) and (9), purely due to non-constitution of the Tribunal.
  • Similar relief was granted by the same Court in SAJ Food Products Pvt. Ltd. vs. State of Bihar & Others (CWJC No. 15465 of 2022), and parity should follow.

Respondent's Arguments

  • The State respondents acknowledged the non-constitution of the Tribunal and had already issued a removal-of-difficulties notification addressing the resulting limitation issue for filing appeals once the Tribunal becomes functional.

Court Order / Findings

  • The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Section 112(9) of the BGST Act merely because the Tribunal has not been constituted by the respondents themselves, and directed that recovery of the balance disputed tax be deemed stayed, subject to the petitioner depositing 20% of the remaining disputed tax (in addition to any amount already deposited under Section 107(6)).
  • The stay was not left open-ended: the petitioner was required to file the Tribunal appeal within the time to be specified once the Tribunal is constituted and functional, and to observe all statutory requirements for such appeal.
  • Liberty was reserved to the respondent-authorities to proceed further in accordance with law if the petitioner chooses not to avail the appellate remedy once the Tribunal becomes available.

Important Clarification

Non-constitution of the GST Appellate Tribunal cannot be permitted to deprive a taxpayer of the substantive benefit of stay of recovery that Section 112(8)/(9) of the GST Act would otherwise confer upon filing a Tribunal appeal — courts extend this benefit interim, conditioned on deposit of the prescribed 20% of disputed tax, but balance this by requiring the taxpayer to actually file the appeal once the Tribunal becomes functional, failing which recovery proceedings may resume.

Sections Involved

  • Section 112(8) and (9), Bihar Goods and Services Tax Act, 2017 – prescribe the pre-deposit required to file a Tribunal appeal and the consequent automatic stay of recovery of the balance disputed amount.
  • Section 107(6), Bihar Goods and Services Tax Act, 2017 – prescribes the pre-deposit for the first appellate stage before the Appellate Authority.
  • Section 172, Bihar Goods and Services Tax Act, 2017 – empowers the Government to issue orders removing difficulties in giving effect to the Act, invoked here for the limitation notification.

Decision – In Favour of

The writ petition was disposed of with conditional interim protection from recovery, pending constitution of the Tribunal — favouring the Assessee on the interim relief, without a final decision on the merits of the underlying tax dispute.

Case Details

Court: High Court of Judicature at Patna
Case No.: Civil Writ Jurisdiction Case No. 5316 of 2023
Coram: Hon'ble the Chief Justice K. Vinod Chandran and Hon'ble Mr. Justice Madhuresh Prasad
Date of Order: 24.04.2023

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