Case Law Details
Sabita Singh Vs Union of India (Patna High Court)
In Sabita Singh v. Union of India, the Patna High Court addressed a tax recovery dispute under the Bihar Goods and Services Tax (B.G.S.T.) Act. The petitioner, Sabita Singh, sought relief under Article 226 of the Constitution, contending that due to the non-constitution of the GST Appellate Tribunal (GSTAT), she was unable to file a statutory appeal as permitted under Section 112 of the B.G.S.T. Act. Without this tribunal, she could not secure an automatic stay on recovery by paying the required deposit under the Act, leaving her vulnerable to tax recovery actions without recourse to appeal.
Acknowledging the petitioner’s dilemma, the court granted a conditional stay on tax recovery, stipulating that the petitioner must deposit an additional 20% of the disputed tax amount (if not already deposited) to secure a stay under Section 112(9) of the B.G.S.T. Act. The Court emphasized that taxpayers should not be deprived of their statutory right to appeal due to administrative delays in establishing the tribunal. However, the stay would not be indefinite; once the tribunal is constituted, the petitioner is required to file the appeal formally within a specified timeframe, ensuring compliance with procedural requirements. Failure to file the appeal upon the tribunal’s establishment would allow tax authorities to proceed with recovery actions.
This ruling aligns with prior judgments, including the court’s decision in SAJ Food Products Pvt. Ltd. v. The State of Bihar, where similar relief was granted. The Patna High Court’s decision underscores the need for timely tribunal formation to ensure taxpayer access to appeals and uphold procedural justice in tax disputes.
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. The learned Counsel for the petitioner submits that the entire tax demand has been satisfied, which shall be verified by the Assessing Officer and if it is satisfied, the 20% deposit need not be paid, but otherwise stay of recovery shall be only on the deposit of the 20% of the balance dues in addition to the 10% deposited on first appeal.
8. With the above liberty, observation and directions, the writ petition stands disposed of.
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