TaxTMI 
TaxTMI 
2026 (7) TMI 1761
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....er, whereby a total demand of tax of Rs. 8,46,476 /- along with calculated interest of Rs. 5,71,372/- and penalty amounting to Rs. 84,646/- has been created against the petitioner under sub-section 9 of section 73 of the Central Goods and Services Tax Act, 2017 ("CGST, Act 2017" for short) or the Bihar Goods and Services Tax Act, 2017 ("BGST Act, 2017" for short) for the tax period April 2020-March 2021, because the above impugned order has imposed demand of tax, interest and penalty based on assumptions, conjectures and surmises without due application of mind by the Proper Officer, and because the above order is passed without the authority of GST Law and without adhering to the scheme of the GST Act, and because the above order is passed without adhering to the principles of natural justice as the above order along with the related show cause notice and reminders to show cause notices were not effectively communicated to the petitioner and because no proper opportunity of personal hearing was afforded during the adjudication and even before passing the above impugned order which is violative of the provisions of section 75(4) of the CGST/BGST Act, 2017 and because the above orde....
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....ties to drop the impugned proceedings against the petitioner for tax period April 2020-March 2021 and in case any clarification is required by the respondents in relation to the allegations imposed upon the petitioner through the above impugned Show Cause Notice dated 25/10/2024 as confirmed by the above impugned Demand Order dated 18/02/2025, the respondents may further be directed to initiate a fresh proceedings by issuing a Show cause Notice (subject to the limitation for issuance of such notices as envisaged under the CGST/BGST Act, 2017) and after providing reasonable time to file a reply and an effective opportunity of personal hearing to the petitioner to represent their case, may complete the adjudication on merits in accordance with the provisions of the CGST/BGST Act, 2017 and Principles of Natural Justice; (iv) For further issuance of a writ or order or direction upon the Respondents for quashing the Notice for recovery u/s 79(1)(c) of the CGST/BGST Act, 2017 in form GST DRC-13 dated 16/03/2026 bearing Memo No 417 issued by Respondent No. 3 whereby a Lien has been marked against the Bank Accounts of the petitioner maintained with Axis Bank, Boring Road, Branch f....
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....s and orders are uploaded on the GST portal of the petitioner which can be assessed by logging into the GST common portal. 4. As per GST DRC-13 Notice, a sum of Rs. 22,05,624/- on account of tax interest and penalty was outstanding for proceeding under GST for the Financial Year 2019-20 and 2020- 21. It is stated that having no option and not agreeing with the impugned demands, the petitioner gave three signed cheques of amounts and dates as per the direction of the respondent authorities and after signing the tax challan for immediate release of the bank account, the respondent no.3 issued a letter in Form DRC-14 dated 17.12.2025 to unblock the account of the petitioner as after recovery of the outstanding demand against the petitioner. 5. It is stated that a notice was issued under the signature of respondent no.3 for recovery from third party under Section 79(1)(C) of the CGST/BGST Act, 2017 in Form GST DRC-13 dated 16.03.2026 in Memo No. 417 for holding of Rs. 16,11,951/- towards outstanding amount of tax interest and penalty for the Financial Year 2020-21. Submissions on behalf of the Petitioner 6. Learned counsel for the petitioner submits that after making paymen....
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....of this Court; Shree Ram Sales LLP vs. The State of Bihar and Ors. (CWJC No. 2768 of 2025), M/s Binod Traders vs. Union of India (CWJC No. 5495 of 2025), Durga Paper Plate Industries vs. Union of India (CWJC No. 7911 of 2025), Raja babu Kapra Ghar vs. Union of India (CWJC No. 6640 of 2025), M/s Shree Shyam Trading Co. vs. the Union of India & Ors. (CWJC No. 5661 of 2025). 10. Learned counsel submits that the respondent authorities have failed to ensure that there is actual service of the impugned notice dated 25.10.2024 and the subsequent order dated 18.02.2025 upon the petitioner due to which the petitioner was deprived of any opportunity to file a reply. It is submitted that the petitioner came to know about the proceedings for the Financial Year 2020-21 only upon attachment of its bank account and by that time, the impugned order dated 18.02.2025 had already attained finality due to which the petitioner also lost his right to file an appeal under Section 107 of the CGST/BGST Act, 2017 within the prescribed time limit due to non-communication of the said order. Submissions on behalf of the Respondents 11. A counter affidavit has been filed on behalf of the respondent. It....
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....uance of show cause notice and demand notice arising out of the impugned adjudication order. 16. Learned counsel submits that the conduct of the petitioner may be seen from the fact that the bank account of the petitioner was attached in November, 2025, whereafter on 15.12.2025, the petitioner furnished the undertaking and three post-dated cheques to the department, he cited his poor financial condition and by offering three post-dated cheques, he took benefit from the department to allow him to run the bank accounts for smooth conduct of business. The department allowed the petitioner to operate the accounts by withdrawing the hold and thereby the petitioner took advantage of the undertaking and the post-dated cheques given by him to the department. In fact, one of the cheques have been allowed to be encashed, but subsequently, under legal advice, the petitioner has chosen to file this writ application. 17. It is submitted that in the facts and circumstances of the present case, the petitioner has made itself disentitled for the reliefs prayed in the writ application. Reliance has also been placed on the judgments of the Hon'ble Madhya Pradesh High Court in the case of M/s Y....
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....unsel for the State at length. The petitioner has challenged the show cause notice dated 25.10.2024 (Annexure 'P/2' series) and the ex-parte summary of order dated 18.02.2025 (Annexure 'P/3' series). A perusal of Annexure 'P/2' would show that as per return filed by taxpayer and data available on GST portal for the Financial Year 2020- 21, some discrepancies were found. Relevant part of Annexure 'P/2' are as under:- "1. As per returns for the said period, following discrepancies has been found Tax liability as per GSTR-01 Tax paid as per GSTR 3B Less tax paid 1654984 1592458 62526 2. As per returns GSTR-3B for the period mentioned above, it is clear that you have claimed excess ITC in comparison to ITC accrued as per GSTR-2A. FY 2020-21 ITC claimed in GSTR 3B ITC accrued as per GSTR 2A Excess ITC claim in GSTR-3B 629268 184419 783949 22. In view of the aforementioned discrepancies, the department decided to issue a 'SCN' under Section 73(1) of the BGST Act, 2017, read with Rule 142(1) "Ground:- Excess claim of ITC and suppression of turnover." The taxes and other dues were calculated as under:- "Tax and other d....
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....2325;ी स्थिति निम्नवत् पायी गयी :- Particulars CGST/SGST ITC Availed in GSTR-3B 2629268 ITC Auto populated in GSTR-2A 184419 Differences 783949 Particulars CGST/SGST Tax Liability as per GSTR 1 1654984 Tax Paid as per GSTR 3B 1592458 Differences 62526 उक्त से स्पष्ट होता है कि आपके द्वारा CGST/SGST के अंतर्गत रू० 846476 का कर भुगतान नहीं किया गया है। तथा CGST/SGST के अंतर्गत रू० 243683.00 Excess ITC का दावा किया गया है। Short....
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.... Total 846476 533280 1379756 उपरोक्त राशि रू0 1379756.00 के लिए विहित प्रपत्र DRC - 01 (Ref-No-ZD1010240213690- 26/10/2024) में सूचना निर्गत किया गया। जवाब की तिथि अथवा साक्ष्य प्रस्तुत करने और कर, ब्याज एवं अद्यतन शास्ति की राशि का भुगतान करने के लिए करदाता को दिनांक 25.11.2024 तक स&#....
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....2351;ा। परन्तु इनके द्वारा SCN का जवाब नहीं दिया गया। अतः BGST ACT 2017 की धारा 73 के आलोक में अग्रेतर कार्रवाई केन्द्रीय / बिहार माल सेवा कर अधिनियम 2017 की धारा 73 (9) के अंतर्गत एक पक्षीय कार्रवाई करते हुए कर, ब्याज एवं शास्ति अधिरोप&....
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....2; DRC 07 निर्गत करें । ह०/- राज्य कर सहायक आयुक्त दानापुर अंचल-2. दानापुर" 25. The above-mentioned summary of orders has been challenged on the ground of it's being an ex-parte order and noncompliance with the requirement of Section 169 of the BGST Act, 2017. It is the case of the petitioner that the SCN was uploaded on the GST portal under the heading "Additional Notices and Orders" which is not a proper compliance. 26. On perusal of the writ application, this Court finds that the impugned SCN and the summary of orders have been challenged on the premise of non-compliance with Section 169 of the BGST Act. Petitioner has chosen not to speak anything on merit on the allegations that the petitioner had availed huge amount of excess Input Tax Credit (ITC). The SCN in GST DRC-01 clearly states the ITC approved as per GSTR - 2A was Rs. 1,84,419/- whereas the ITC cl....
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...., chosen to continue with this writ petition. 30. To this Court, it appears that only ornamental statements have been made by the petitioner. In this regard, Section 73(1) of the BGST Act, 2017 and Rule 142(1) of the CGST Rules, 2017 are being reproduced hereunder for a ready reference:- Section 73(1) of the BGST Act "^173. Determination of tax ^2[, pertaining to the period upto Financial Year 2023-24] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount s....
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....6; कर, ब्याज एवं शास्ति बकाया होने के कारण मेरे खाता संख्या को Attach किया गया है। मैं बकाये राशि के भुगतान हेतु प्रतिबद्ध हूँ। मेरी आर्थिक स्थिति खराब होने एवं व्यवसाय सुगमता पूर्वक चल सके इसके लिए मेरे Bank A/C को Deattached कि&#....
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....at cheques were furnished in protest or under compulsion of the attachment. The statements in this regard made in the writ petition has been made with an afterthought at much belated stage. 34. This writ application has been filed after three months from the date of execution of the undertaking and submission of the three post-dated cheques. There is nothing on the record to take a view that for more than three months after execution of the undertaking and submission of the post-dated cheques, the petitioner could not have raised any protest or preferred an appeal against the impugned SCN (Annexure 'P/1') and the impugned summary of order (Annexure 'P/2'). This is not a bona fide writ application. The writ remedy is meant for those who come clean before this Court. In the facts of this case, the plenary and discretionary jurisdiction of issuance of extraordinary writ is not fit to be exercised. The conduct of the petitioner is such that it requires dismissal of the writ application with cost, which we assess at Rs. 25,000/-. 35. The writ application is dismissed. Cost be paid to the Patna High Court Legal Services Committee within a period of one month from today and receipt ....