File Appeal Once Tribunal Is Constituted: Patna High Court Allows Assessee To Prefer Appeal Outside Limitation Period

The Patna High Court has allowed the petitioner assessee to file an appeal under Section 112 of the Bihar Goods and Services Tax Act 2017 (BGST Act) outside the period of limitation as envisaged under the Act since the impugned order preventing the assessee from availing the benefit of stay on the recovery of balance GST amount was passed when the Appellate Tribunal was not constituted in the state.

The division bench comprising Acting Chief Justice Chakradhari Sharan Singh and Justice Madhuresh Prasad was hearing a petition seeking issuance of a writ of certiorari for quashing of the order issued by the Additional Commissioner of State Taxes, whereby the appeal preferred by the petitioner under section 107 of the Central Goods and Services Tax Act 2017 and Bihar Goods and Services Tax Act, 2017 (BGST Act) was rejected.

The petitioner had sought statutory remedy of appeal against the impugned order before the Appellate Tribunal under Section 112 of the BGST Act.

However, due to the non-constitution of the Tribunal, the petitioner was deprived of his statutory remedy under Sub-Section (8) and (9) of Section 112 of the BGST Act. Under the circumstances, the petitioner was also prevented from availing the benefit of stay of recovery of the balance amount of tax in terms of the above provisions upon deposit of the amounts as contemplated under Sub-section (8) of Section 112.

The bench noted that the respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and have come out with a notification for removal of difficulties, in exercise of powers under Section 172 of the BGST Act which provides that period of limitation for the purpose of preferring 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 BGST Act, enters office.

The bench also noted that in terms of the liberty granted in the earlier order, in these proceedings, the petitioner had already deposited 20 percent of the remaining amount of tax in dispute.

Reliance was placed on Angel Engicon Private Limited vs.the State of Bihar & Anr. passed in C.W.J.C No. 1920 of 2023 wherein it was held that “If the petitioner deposits a sum equal to 20 percent of the remaining amount of tax in dispute, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, then 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 balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. The statutory relief of stay on ”

While disposing of the application, the bench opined that the statutory relief of stay on deposit of the statutory amount, cannot be open ended.

“For balancing the equities, therefore, since 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 BGST Act, once the Tribunal is constituted and made functional and the President or the State President may enter 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.”

The bench further held, “In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under Section 112 of the BGST Act before the Tribunal within the period which may be specified upon constitution of the Tribunal, the respondent-Authorities would be at liberty to proceed further in the matter, in accordance with law.”

Case Title: Gammon Engineers and Contractors Pvt. Ltd vs. The State of Bihar Civil Writ Jurisdiction Case No.14381 of 2022

Citation: 2023 LiveLaw (Pat) 20