The Patna High Court has stayed the recovery until the GST tribunal is made functional and subjected to 10% pre-deposit.
The bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy has observed 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 GST 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.
Table of Contents
Background
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 judgement in SAJ Food Products Pvt. Ltd. vs. The State of Bihar & Others, 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.
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.
Conclusion
The court directed 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.
The court stated that 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 Section 107 (6) 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.
The court opined that 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.
The court held that 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-department would be at liberty to proceed further in the matter, in accordance with law.
Case Details
Case Title: M/s Maa Sunaina Construction Private Limited Versus UOI
Case No.: Civil Writ Jurisdiction Case No.14554 of 2024
Date: 21-10-2024
Counsel For Petitioner: Anubhav Khowala
Counsel For Respondent: Dr. K.N. Singh
