Case Law Details
Maa Sunaina Construction Private Limited Vs Union of India (Patna High Court)
In the case of Maa Sunaina Construction Private Limited Vs Union of India, the Calcutta High Court addressed the issue of pre-deposit requirements for filing appeals before the Goods and Services Tax (GST) Tribunal. Under Section 112 of the Central Goods and Services Tax Act, 2017, taxpayers must deposit a percentage of the disputed tax amount before appealing to the tribunal. Initially, this pre-deposit was set at 20%, but a recent amendment reduced it to 10%. However, this change only takes effect from November 1, 2024, and GST Tribunals have not yet been constituted. In the interim, the Court ruled that the petitioner is entitled to a stay on recovery after paying 10% of the disputed tax amount until the tribunal is functional.
The court emphasized that taxpayers should not be penalized for the government’s failure to establish the GST Tribunal. It directed that upon payment of the required 10% deposit, recovery actions should be stayed. However, once the tribunal is constituted, the petitioner must file an appeal within the prescribed time. If the petitioner chooses not to file an appeal, the authorities may proceed with recovery measures. The court also ordered the release of any bank account attachments if the taxpayer complies with the 10% deposit condition. This ruling provides temporary relief to taxpayers awaiting the establishment of GST Tribunals.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
An amendment has been made to Section-112 of the Central Goods and Services Tax Act, 2017 substituting “twenty per cent” pre deposit to “ten per cent” for maintaining an appeal before the Goods and Services Tax Tribunal. The Tribunal has not yet been constituted and this Court had been granting orders based on the judgment in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others in C.W.J.C. No. 15465 of 2022, allowing the assessee to deposit twenty per cent of the disputed amount of tax, till the Tribunal is constituted and an appeal is filed also allowing stay of recovery.
2. As of now pre-deposit has been reduced to “ten per cent” but however, the same is made effective only from 01.11.2024. It is an admitted position that the GST Tribunals have not been constituted as yet and there is no possibility of an appeal being filed prior to 01.11.2024. In such circumstance we direct that the assessee on payment of “ten per cent” of the tax amounts in dispute shall be entitled to stay of recovery till the Tribunal is constituted and an appeal is filed within such term as provided therein.
3. 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 10 percent of the 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.
(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.
(ii) 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.
(iv) If the above order is complied with and a sum equivalent to 10 per cent of the remaining amount of the tax in dispute is paid then, if there is any attachment of the bank account of the petitioner pursuant to the demand, the same shall be released.
4. With the above liberty, observation and directions, the writ petition stands disposed of.
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