The Patna High Court observed that the taxpayer cannot be deprived of benefit due to Non-Constitution of GST Appellate Tribunal. The court stayed the recovery proceedings.
The bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy, in its conditions stated that “The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.”
Kalpana Medical Hall, a proprietary concern, has filed a petition under Article 226 of the Constitution of India, seeking various reliefs. The petitioner intends to avail the statutory remedy of appeal against the contested GST order before the Appellate Tribunal under Section 112 of the Bihar Goods and Services Tax Act (B.G.S.T. Act).
However, due to the non-constitution of the GST Tribunal, the petitioner is unable to exercise their statutory remedies under Subsections (8) and (9) of Section 112 of the B.G.S.T. Act. Consequently, the assessee is also barred from seeking a stay on the recovery of the outstanding tax amount as per the provisions of Section 112 (8) and (9) of the B.G.S.T. Act, even after depositing the required amounts as stipulated in Subsection (8) of Section 112.
In response to this situation, the GST authorities have acknowledged the issue of the Tribunal’s non-constitution. They have issued Notification Order No. 09/2019-State Tax, S.O. 399, dated 11.12.2019, invoking powers under Section 172 of the B.G.S.T. Act. This notification stipulated that the period for filing an appeal before the Tribunal under Section 112 will commence only after the President or State President of the Tribunal assumes office upon its constitution under Section 109 of the B.G.S.T. Act.
The Court disposed of the petition with the following terms:
(i) If the petitioner deposits 20% of the remaining disputed tax amount (in addition to what was previously deposited under Section 107(6) of the B.G.S.T. Act), they must receive the statutory stay benefit under Section 112(9) of the B.G.S.T. Act. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. This stay is granted because the Tribunal has not been constituted, and similar relief has been given in a previous case (SAJ Food Products Pvt. Ltd. vs. The State of Bihar).
(ii) The stay is not indefinite. The petitioner must file an appeal under Section 112 of the B.G.S.T. Act once the Tribunal is constituted and functional.
(iii) If the petitioner does not file an appeal within the specified period after the Tribunal is constituted, the respondent authorities can proceed according to the law.
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