Case Law Details
SBI Life Insurance Company Ltd. Vs Union of India (Patna High Court)
Introduction: The recent case of SBI Life Insurance Company Ltd. vs Union of India through the Ministry of Finance, heard in the Patna High Court, highlights the complexities surrounding GST recovery proceedings. The petitioner sought relief against the recovery of tax amounts due to the non-constitution of the Appellate Tribunal, hindering their statutory remedy under the Bihar Goods and Services Tax Act.
Detailed Analysis: The crux of the matter revolves around the petitioner’s inability to avail their statutory remedy of appeal due to the non-constitution of the Tribunal. This predicament not only deprives the petitioner of their legal recourse but also prevents them from obtaining the benefit of stay of tax recovery, as stipulated under relevant sections of the B.G.S.T. Act.
The Court, acknowledging the gravity of the situation, issued specific directives to address the petitioner’s concerns. It mandated the deposit of a percentage of the remaining tax amount in dispute to qualify for the statutory benefit of stay. Additionally, the Court outlined the necessity for the petitioner to file an appeal once the Tribunal is constituted, emphasizing the importance of adhering to statutory requirements.
Furthermore, the Court underscored the consequences of failing to avail the remedy of appeal within the specified period, granting leeway for the authorities to proceed with further actions as per the law. The judgment also addressed the issue of bank account attachment, stipulating its release upon compliance with the court’s directives.
Conclusion: The judgment delivered by the Patna High Court in the SBI Life Insurance case reflects a balanced approach aimed at safeguarding the interests of both the petitioner and the authorities. By granting relief against GST recovery proceedings in light of the non-constitution of the Tribunal, the Court underscores the importance of upholding statutory rights and procedural fairness. This case serves as a significant precedent in navigating the complexities of GST law and ensuring access to justice for all parties involved.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
1. The instant writ petition has been filed under Article 226 of the Constitution of India seeking multifarious
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 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 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.
(iv) If the above order is complied with and a sum equivalent to 20 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.
7. With the above liberty, observation and directions, the writ petition stands disposed of.
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