Patna High Court Grants Stay To Trimurti Private Limited On GST Demand Amid Tribunal Constitution Delay

The petitioner's ability to exercise the statutory remedy, however, was hindered by the non-constitution of the Appellate Tribunal, as mandated by Sub-Section (8) and Sub-Section (9) of Section 112 of the BGST Act. Consequently, the petitioner was also unable to benefit from the stay of tax recovery, as outlined in Section 112 (8) and (9) of the BGST Act, upon depositing the requisite amounts.

Acknowledging the absence of the Tribunal, the respondent State authorities issued a notification (Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019) under Section 172 of the BGST Act. This notification clarified that the period of limitation for filing an appeal before the Tribunal under Section 112 would commence only after the Tribunal's President, or the State President, enters office following its constitution under Section 109 of the BGST Act.

The court, in disposing of the writ petition, outlined the following terms:

1. Subject to the deposit of 20 percent of the remaining disputed tax amount (if not already deposited), the petitioner is entitled to the statutory benefit of stay under Sub-Section (9) of Section 112 of the BGST Act. This stay prevents the recovery of the remaining tax amount, with a similar precedent set in the case of SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others (C.W.J.C. No. 15465 of 2022).

2. While the statutory relief of stay is granted, the court emphasizes that it cannot be open-ended. To balance equities, the petitioner must file the appeal under Section 112 of the BGST Act once the Tribunal is constituted and functional. The appeal should adhere to statutory requirements after the Tribunal's establishment, facilitating its consideration.

3. If the petitioner chooses not to file the appeal within the specified period upon the Tribunal's constitution, the respondent authorities are at liberty to proceed further in accordance with the law.

4. Compliance with the court's order, including the deposit of 20 percent of the remaining disputed tax amount, will lead to the release of any bank account attachment pursuant to the demand.

Appearance : For the Petitioner/s : Mrs.Archana Sinha, Advocate

For the Respondent/s : Mr.Vikash Kumar ( SC-11 )

Case Title: M/s Trimurti Private Limited vs The State of Bihar & Ors

LL Citation: 2023 LiveLaw (Pat) 148

Case No.: Civil Writ Jurisdiction Case No.16748 of 2023

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