M/S K.K. Enterprises A Proprietorship Firm vs. The State Of Bihar

Held

The Court held that the writ application is not maintainable due to the inordinate delay and the availability of an alternative statutory remedy. The Court relied on its previous judgment in CWJC No. 6180 of 2026 (M.K. Traders Vrs. State of Bihar and Ors.) and Supreme Court pronouncements in CIT Vrs Chhabil Dass Agrawal and CCT Vrs Glaxo Smith Kline Consumer Health Care Ltd. The Court emphasized that entertaining a writ petition filed beyond the statutory period for appeal would frustrate the legislative intent. While acknowledging that an alternative remedy is not an absolute bar in exceptional circumstances (breach of fundamental rights, violation of natural justice, excess of jurisdiction, challenge to vires), the Court found that the present case, involving a delay of almost nine months beyond the statutory appeal period, does not fall into such exceptional categories. The Court noted that the petitioner appeared before the Adjudicating Authority and requested an adjournment but failed to file a reply, and subsequently did not prefer an appeal against the impugned order, instead filing the writ petition after a significant delay.

Facts

M/s K.K. Enterprises, a proprietorship firm dealing in hardware, sanitary fittings, and paints, filed a writ petition challenging an order dated 26.06.2025 passed by the Assistant Commissioner, Central GST and Central Excise, Begusarai (Respondent No. 2). This order confirmed a tax demand of Rs. 26,05,220/- under Section 74(9) of the CGST Act, 2017, along with applicable interest. The demand arose from an audit for financial years 2018-19, 2019-20, and 2020-21, which alleged excess utilization of Input Tax Credit (ITC). A show cause notice was issued on 25.07.2023. The petitioner's representative appeared on 13.11.2024 and requested a 5-day adjournment to file a detailed reply, citing dependence on a tax consultant. The petitioner claims to have learned about the ex-parte order in late 2025.

Key Issues

1. Whether the writ application is maintainable given the existence of an alternative statutory remedy of appeal under Section 107 of the CGST Act, 2017, and the inordinate delay in filing the writ petition? Petitioner's arguments: The petitioner contends that they were not aware of the proceedings until late 2025 and that the order was passed ex-parte. They also imply that the error was bonafide and not fraudulent. The petitioner's representative requested an adjournment which was allegedly not granted properly, and they are dependent on a tax consultant for GST compliance. Revenue's arguments: The revenue argues that a show cause notice was served, and the petitioner's representative appeared on 13.11.2024, requesting an adjournment. The petitioner was given a further opportunity for personal hearing on 29.05.2025 but failed to appear or submit a reply, compelling the authority to pass an ex-parte order. The revenue further contends that the petitioner has an alternative remedy under Section 107 of the CGST Act, which they have not availed, and the writ petition has been filed after an inordinate delay of approximately nine months, making it liable for rejection.