High Court Directs Consideration of Appeal on Merits Despite Stay on Division Bench Judgment

Case Name:

M/s Friends Mobile through its Proprietor Md. Quadir Khan vs. The State of Bihar through the Commissioner of Commercial State Taxes and Others

Key Takeaways:

1. The High Court directed the consideration of the appeal on its merits despite the stay on the Division Bench judgment by the Supreme Court.
2. The Commissioner, Commercial Taxes, Patna, was instructed to issue necessary directions for consideration of appeals when the subject matter is pending before the Supreme Court.
3. There should be no insistence for payment of the ten percent due and payable under Section 107 of the GST Act from the Electronic Cash Ledger.

Case Synopsis:

The case involves M/s Friends Mobile, represented by its proprietor Md. Quadir Khan, as the petitioner, and The State of Bihar through the Commissioner of Commercial State Taxes, the Assistant Commissioner, State Taxes, and the Additional Commissioner, State Taxes, as the respondents.

The judgment was delivered by the Honorable Chief Justice and Mr. Justice Rajiv Roy on 06-12-2023. The main issue raised in the writ petition was whether, on filing an appeal, ten percent of the due amounts are to be paid from the Electronic Cash Ledger or the Electronic Credit Ledger under the Goods and Services Tax Act, 2017 (GST Act).

The petitioner had paid the ten percent amount from the Electronic Credit Ledger, but the Appellate Authority rejected the appeal, stating that the ten percent had to be paid from the Electronic Cash Ledger. This decision was based on a Division Bench judgment in M/s Flipkart Internet Pvt. Ltd. v. The State of Bihar & Ors., which was later stayed by the Hon’ble Supreme Court in Special Leave to Appeal (C) No. 25437 of 2023.

The High Court considered the provisions of the GST Act and a notification issued by the Ministry of Finance, Department of Revenue, and concluded that the appeal should be considered on its merits, especially since the Division Bench judgment had been stayed by the Supreme Court.

As a result, the High Court set aside the order in appeal dated 10.01.2023 and directed the same to be considered on merits. It was also stated that the Commissioner, Commercial Taxes, Patna, should issue necessary directions for consideration of appeals when the subject matter is pending before the Supreme Court, and there should be no insistence for payment of the ten percent due and payable under Section 107 of the GST Act from the Electronic Cash Ledger.

FAQ:

Q1: What was the main issue in the case?

A1: The main issue was whether ten percent of the due amounts are to be paid from the Electronic Cash Ledger or the Electronic Credit Ledger under the Goods and Services Tax Act, 2017.

Q2: What was the decision of the High Court?

A2: The High Court set aside the order in appeal and directed the consideration of the appeal on its merits, despite the stay on the Division Bench judgment by the Supreme Court.

Q3: What were the instructions given to the Commissioner, Commercial Taxes, Patna?

A3: The Commissioner was instructed to issue necessary directions for consideration of appeals when the subject matter is pending before the Supreme Court, and there should be no insistence for payment of the ten percent due and payable under Section 107 of the GST Act from the Electronic Cash Ledger.