M/S Banwarilal Wood Craft (Fy-2021-22) vs. The State Of Bihar

Held

The Court held that the writ petition was not maintainable due to the availability of an alternative statutory remedy under Section 107 of the CGST/BGST Act, 2017, and the petitioner's inordinate delay of two years and six months in filing the writ petition. The Court relied on its previous judgment in CWJC No. 6180 of 2026 (M.K. Traders Vrs. State of Bihar and Ors.), which held that entertaining a writ petition filed after such a significant delay would frustrate the legislative intent and render the statutory scheme otiose. While acknowledging that an alternative remedy is not an absolute bar to a writ petition in exceptional circumstances (as per the Supreme Court in ACST Vrs. M/s Commercial Steel Ltd.), the Court found that the present case did not fall within those exceptions. The Court noted that the petitioner had failed to submit a reply despite being served with notices under Sections 61 and 73(1) on the common portal and registered email ID. Consequently, the impugned order was passed, and the petitioner failed to file a statutory appeal. The Court explicitly stated that the delay made the writ petition non-entertainable, precluding it from considering the merits of the case.

Facts

The petitioner, M/s Banwarilal Wood Craft, a proprietorship firm, filed a writ petition challenging an ex-parte demand order dated January 11, 2023, and a summary order in Form GST DRC-07, both issued by the Assistant Commissioner State Tax, Purnea Circle. These orders created a demand of Rs. 6,39,959/- for the financial year 2021-22 under Section 73(9) of the CGST/BGST Act, 2017. The petitioner also challenged a show cause notice dated November 30, 2022, issued under Section 73(1) and a notice dated January 7, 2025, under Section 79(1)(c) that led to the blocking of their bank accounts. The petitioner claimed their business was shut down from 2019-2020, and they assumed their GST registration was cancelled. They argued that the demand order was passed in violation of Sections 75(4) and 75(6) of the CGST/BGST Act, 2017, as they were not granted an effective personal hearing. The revenue contended that notices were validly served via the GST portal and the petitioner failed to file a reply or appeal.

Key Issues

1. Whether the ex-parte demand order and summary order dated January 11, 2023, passed under Section 73(9) of the CGST/BGST Act, 2017, are liable to be quashed for alleged violation of principles of natural justice, specifically Section 75(4) and 75(6) of the CGST/BGST Act, 2017, due to the lack of an effective personal hearing? 2. Whether the writ petition is maintainable given the availability of an alternative statutory remedy under Section 107 of the CGST/BGST Act, 2017, and the petitioner's delay in filing the writ petition? Petitioner's arguments: The petitioner argued that the show cause notice was uploaded in the "Additional Notices and Orders" tab instead of the "Notices and Orders" tab, and the date fixed for personal hearing (December 12, 2022) was before the due date for filing a reply (December 15, 2022), thus violating Section 75(4). They also claimed they were unaware of the proceedings due to the belief that their registration was cancelled and that their accountants had committed fraud. Revenue's arguments: The revenue argued that the writ petition was misconceived, as notices were validly served through the common GST portal under Section 169. They asserted that the petitioner failed to file a reply to the show cause notice and did not avail the statutory remedy of appeal under Section 107 within the prescribed time, leading to an inordinate delay of two years and six months in filing the writ petition.