In a recent ruling, the Patna High Court granted a stay on tax recovery for a pending appeal on a conditional deposit of 20% disputed tax due to the non-constitution of the Goods and Service Tax (GST) Tribunal.
Sabita Singh, the petitioner filed a writ petition seeking relief regarding her rights under the Bihar Goods and Services Tax (BGST) Act. The petitioner wishes to appeal an order under the BGST Act. However, due to the non-constitution of the GST Appellate Tribunal in Bihar, she cannot file this appeal and seek a stay on the tax recovery.
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The petitioner’s counsel argued the petitioner was deprived of her statutory right to appeal due to the absence of the tribunal, preventing her from seeking a stay on the tax recovery. The petitioner’s counsel referenced a similar case SAJ Food Products Pvt. Ltd. vs. State of Bihar, where relief was granted under comparable circumstances.
The respondent’s counsel argued that a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 was issued to clarify that the limitation period for filing an appeal before the tribunal would commence only after the tribunal is constituted and a President is appointed.
The bench comprising Chief Justice of Patna High Court, K. Vinod Chandran and Justice Partha Sarthy observed both side’s arguments. The court recognized the petitioner’s inability to appeal due to the non-constitution of the tribunal and noted the respondents’ notification.
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The court aimed to balance the petitioner’s right to statutory remedies with the government’s interest in tax recovery. It observed that a stay should not be “open-ended” and that the petitioner must file the appeal once the tribunal is functional.
Therefore, the court granted a stay on tax recovery, subject to the petitioner depositing 20% of the disputed tax amount in addition to any previously deposited amounts. The petitioner is required to file her appeal before the Tribunal once it is established. The court directed the Assessing Officer to verify if the petitioner had satisfied the tax demand. If so, the 20% deposit would not be required; otherwise, the stay would depend on this deposit.
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