Case Law Details
Angel Engicon Private Limited Vs State of Bihar (Patna High Court)
Introduction: In a recent legal battle, Angel Engicon Private Limited contested an order dated 08.06.2022 passed by the Additional Commissioner of State Tax (Appeal), Patna West, Patna, which rejected their appeal against an assessment order. This case touches upon the statutory remedies available under the Bihar Goods and Services Tax Act (B.G.S.T. Act) and the complexities arising from the non-constitution of the Appellate Tribunal.
Statutory Remedy Under B.G.S.T. Act: The petitioner’s right to appeal against the order was governed by Section 112 of the B.G.S.T. Act. Section 112(8) outlined the conditions for filing an appeal, including the requirement to pay a specific portion of the amount in dispute.
Section 112(9) provided for a stay on recovery proceedings if the appellant complied with Section 112(8).
The Issue: The primary issue in this case was the non-constitution of the Appellate Tribunal. The absence of the Tribunal prevented the petitioner from availing their statutory remedy under Section 112(8) and Section 112(9) of the B.G.S.T. Act.
Notification for Removal of Difficulties: To address the challenges arising from the non-constitution of the Tribunal, the State of Bihar issued a crucial notification on 11.12.2019 under Section 172 of the B.G.S.T. Act. This notification clarified that the period for filing an appeal under Section 112 would only commence after the President or State President of the Appellate Tribunal assumed office following its constitution under Section 109 of the B.G.S.T. Act.
Court’s Decision: The Court ruled that the petitioner’s statutory right to appeal remained intact, and they were entitled to the benefit of a stay on the recovery of the balance tax amount, as per Section 112(9) of the B.G.S.T. Act. The Court emphasized that keeping the writ petition pending would serve no purpose.
The Court directed the petitioner to deposit a sum equal to 20 percent of the remaining tax amount in dispute, in addition to the amount previously deposited under Section 107(6) of the B.G.S.T. Act. This deposit would entitle the petitioner to the statutory benefit of a stay under Section 112(9) of the B.G.S.T. Act, and any recovery proceedings would be considered stayed.
However, the Court emphasized that the relief of stay based on the deposit of the statutory amount could not be open-ended. The petitioner would be required to file their appeal under Section 112 of the B.G.S.T. Act once the Appellate Tribunal was constituted and operational, and the President or State President assumed office. Failing to do so would allow the authorities to proceed further in accordance with the law.
With these directions, observations, and liberty for the petitioner to file an appeal at the appropriate time, the writ application was disposed of.
Conclusion: The Angel Engicon Pvt. Ltd. vs State of Bihar case highlights the challenges faced by taxpayers when statutory remedies are hindered by the non-constitution of crucial bodies. It underscores the importance of clarifications and notifications to ensure that individuals can exercise their legal rights effectively. This case also exemplifies the Court’s role in balancing equities and ensuring that justice is served even in complex situations.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
2. The writ petitioner has assailed an order dated 08.06.2022 passed by the Additional Commissioner of State Tax (Appeal), Patna West, Patna, whereby his appeal against the order of assessment has been rejected.
The petitioner has 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”). Sub-Section 8 of Section 112 reads as follows:-
“(8) No appeal shall be filed under Sub-Section (1), unless the appellant has paid‑
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him, and
(b) a sum equal to twenty percent of the remaining amount of tax in dispute, in addition to the amount paid under Sub-Section (6) of the Section 107, arising from the said order, in relation to which the appeal has been filed.”
Apparently, thus, had an appeal been filed by the petitioner in accordance with the requirement of Section 112 (8) of the B.G.S.T. Act, the recovery proceedings for the balance amount would have been deemed to be stayed till disposal of the appeal, as per Sub-section 9 of Section 112 of the B.G.S.T. Act, which reads as follows:-
“(9) Where the appellant has paid the amount as per Sub-Section (8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.”
Learned counsel for the petitioner submits that 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.
It appears that conscious of the fact of non-constitution of the Tribunal, a notification dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T. Act has been issued by the State of Bihar. Clause 2 of the notification reads as follows:-
“2. For the removal of difficulties, it is hereby clarified that for the purpose of calculating,-
(a) the “three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal” in sub-section (1) of Section 112, the start of the three months period shall be considered to be the later of the following dates:-
(i) date of communication of order; or
(ii) the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under Section 109, enters office;”
Evidently, thus, the notification dated 11.12.2019 provides that the period of limitation, for the purpose of preferring an appeal under Section 112 of the B.G.S.T. Act, 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.
It is thus apparent that petitioner’s statutory right to prefer an appeal survives.
It is also the submission of learned counsel for the petitioner that the petitioner is desirous of availing the statutory remedy of appeal and 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. He, however, is prevented from availing statutory remedy, since the Tribunal has not yet been constituted.
Considering the facts and circumstances above, including the admitted position regarding non-constitution of the Tribunal under Section 109 of the B.G.S.T. Act, this Court is of the opinion that keeping the writ petition pending would serve no useful purpose.
If the petitioner makes a deposit of 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 deposit of the statutory amount, 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.
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.
With the above liberty, observation and directions, the writ application stands disposed of.
