In a recent judgment, the Patna High Court bench comprising of Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad observed that the non-constitution of GST Appellate tribunal deprives Life Insurance Corporation of India’s right to appeal under BGST and directed to file an appeal under section 112 of the Bihar Goods and Services Tax Act ( B.G.S.T. Act), 2017.
The petitioner was desirous of availing statutory remedy of appeal against the impugned order before the Appellate Tribunal (Tribunal) under Section 112 of the Bihar Goods and Services Tax Act ( B.G.S.T. Act).
Due to the non-constitution of the Tribunal, the petitioner is deprived of his statutory remedy under Sub-Section (8) and Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner was prevented from availing the benefit of stay of recovery of the balance amount of tax in terms of Section 112 (8) and (9) of the B.G.S.T Act upon deposit of the amounts as contemplated under Sub-section (8) of Section 112.
It was evident 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. As per provision under Section 172 of the B.G.S.T Act period of limitation to prefer 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 the office.
In the case of Angel Engicon Private Limited vs. the State of Bihar & Anr., it was held that “since the order is being passed due to non-constitution of the Tribunal by the respondent-Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter the office. The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal.”
Mr S. D. Sanjay, Senior Counsel for the petitioner stated that the petitioner has three (3) months under Section 112 (1) of the BGST Act for preferring an Appeal to the Appellate Tribunal, even the statutory period of limitation, has not yet lapsed. Further submitted that at least for three(3) months, the Authorities are not in a position to take any coercive action against the petitioner for recovering the remaining amount of tax in dispute.
A two-member bench comprising of Chakradhari Sharan Singh, ACJ and Madhuresh Prasad J observed that non-constitution of the Appellate Tribunal caused deprivation to the petitioner’s statutory right to appeal under Section 112(8)(9) and held that 20 per cent of the remaining tax in dispute is required to be deposited by the petitioner with due diligence if he is genuinely desirous of availing the remedy of appeal within four(4) weeks.
The Court further directed that the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act, for he cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves. The recovery of the balance amount are deemed to be stayed.
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