The Patna High Court stayed the Goods and Services Tax ( GST ) recovery proceedings, ruling that taxpayers cannot be deprived of their legal rights due to the non-constitution of the GST Appellate Tribunal ( GSTAT ).
The petitioner, M/s GTL Infrastructure Limited filed a writ petition seeking to file an appeal against tax orders under Section 112 of the Bihar Goods and Services Tax Act ( BGST Act), but was unable to do so because the Tribunal, responsible for hearing such appeals, had not yet been constituted.
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As a result, the petitioner was also unable to benefit from a stay on the recovery of the remaining tax amounts, which is normally granted upon deposit of a portion of the disputed amount under Section 112(8) and (9) of the B.G.S.T. Act.
The respondent State authorities have acknowledged the non-constitution of the GST Appellate Tribunal and, to address the issue, issued Order No. 09/2019-State Tax, S.O. 399, dated December 11, 2019.
This notification, issued under Section 172 of the Bihar Goods and Services Tax (B.G.S.T.) Act, aims to remove difficulties caused by the absence of the Tribunal. It clarified that the limitation period for filing an appeal under Section 112 will only commence once the President or State President of the Tribunal assumes office following its constitution under Section 109 of the Act.
In its ruling, the bench of Justice K Vinod Chandran and Justice Partha Sarthy granted relief to the petitioner, subject to the deposit of 20% of the disputed tax amount, in addition to earlier deposits made under Section 107(6) of the B.G.S.T. Act.
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The High Court held that the petitioner cannot be denied the benefit of a stay due to the state’s failure to constitute the Tribunal, and any recovery actions taken so far would be considered stayed.
The Court further directed that once the Tribunal is constituted, the petitioner must file an appeal under Section 112 within the prescribed time. If the petitioner fails to file the appeal, the authorities will be free to proceed with recovery actions.
Additionally, the bench instructed to release the bank account attached if any. The writ petition was disposed of with these directions, ensuring the petitioner retains the statutory right to appeal without facing immediate recovery actions.
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