Case Law Details
Kalpana Medical Hall Vs Union of India (Patna High Court)
In a significant judgment, the Patna High Court addressed the implications of non-constitution of the Goods and Services Tax (GST) Appellate Tribunal under the Bihar GST Act. The case, titled Kalpana Medical Hall Vs Union of India, raised fundamental issues regarding the rights of taxpayers to avail themselves of statutory remedies.
The petitioner, Kalpana Medical Hall, filed a writ petition under Article 226 of the Constitution of India seeking relief against an order under the Bihar Goods and Services Tax Act (B.G.S.T. Act). The core issue stemmed from the non-constitution of the GST Appellate Tribunal, which deprived the petitioner of their right to appeal under Section 112 of the B.G.S.T. Act.
The High Court acknowledged the respondent State authorities’ admission of the non-constitution of the Tribunal and their efforts to address the issue through a notification. This notification aimed to clarify that the period for filing appeals would commence only after the Tribunal’s constitution and the assumption of office by its President or State President.
The court’s decision centered on ensuring justice and equity for the petitioner. It granted interim relief by staying the recovery proceedings against the petitioner, provided they deposited a specified percentage of the disputed tax amount. This decision underscored the principle that taxpayers should not be penalized due to administrative delays or failures in Tribunal constitution.
Moreover, the court imposed conditions for availing the stay, emphasizing that the petitioner must file an appeal once the Tribunal becomes functional. This condition aimed to balance the interests of both parties while upholding the rule of law.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious reliefs.
2. The petitioner essentially is desirous of availing statutory remedy of appeal against the impugned order before the Appellate Tribunal (hereinafter referred to as “Tribunal”) under Section 112 of the Bihar Goods and Services Tax Act (hereinafter referred to as “B.G.S.T. Act”).
3. However, due to 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.
4. Under the circumstances, the petitioner is also prevented from availing the benefit of stay of recovery of 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.
5. 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, in exercise of powers under Section 172 of the B.G.S.T 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 B.G.S.T Act, enters office.
6. This Court is, therefore, inclined to dispose of the instant writ petition in the following terms:-
(i) Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. 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. It is not in dispute that similar relief has been granted by this Court in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in W.J.C. No. 15465 of 2022.
(ii) The statutory relief of stay, on deposit of the statutory amount, however in the opinion of this Court, cannot be open ended. For balancing the equities, therefore, the Court is of the opinion that 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 B.G.S.T. 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.
(iii) In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under Section 112 of the B.G.S.T. 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.
7. With the above liberty, observation and directions, the writ petition stands disposed of.
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