Suman Suresh Fuel Station vs. The State Of Bihar

Held

The Court held that the petitioner had made out a prima facie case that the tax liability was fastened upon non-GST items, namely motor spirit and high-speed diesel. The Court found that the assessment order went to the root of the matter and involved an issue of jurisdiction concerning non-GST items. Consequently, the Court was inclined to interfere with both the assessment order and the appellate order. The assessment order dated 27.04.2024 and the appellate order dated 28.07.2025 were set aside. The matter was remanded back to the Assessing/Adjudicating Authority for a fresh determination of tax liability. The petitioner was directed to appear before the Adjudicating Authority within 20 days with a reply to the show cause and supporting documents. The Adjudicating Authority was directed to fix a hearing date, provide proper intimation, grant a personal hearing, and pass a fresh assessment order within one and a half months from the petitioner's appearance.

Facts

The petitioner, Suman Suresh Fuel Station, filed a writ application challenging an adjudication order dated 27.04.2024, which imposed a demand of Rs. 65,93,780.00. The petitioner also challenged the appellate order dated 28.07.2025. The petitioner, a dealer of petroleum products including motor spirit, high-speed diesel, and lubricants, filed returns for the period 2018-19. The respondent assessing authority detected discrepancies, including non-payment of tax under the reverse charge mechanism. The petitioner contended that motor spirit and high-speed diesel are non-GST items, taxable under Section 9(2) of the CGST Act, and the assessment order erroneously included these items. The petitioner had deposited Rs. 45,987/- under CGST and SGST as directed by a coordinate bench and expressed readiness to pay penalty and interest on RCM liabilities.

Key Issues

1. Whether the Assessing Authority exceeded its jurisdiction by assessing tax on motor spirit and high-speed diesel, which the petitioner claims are non-GST items, contrary to Section 9(2) of the CGST Act? Petitioner's Argument: The petitioner argued that motor spirit and high-speed diesel are non-GST items and are taxable under Section 9(2) of the CGST Act. The Assessing Authority, by assessing tax on invoices pertaining to these items, acted beyond its jurisdiction. The petitioner is ready to pay tax, penalty, and interest on lubricants and commission, which are considered taxable items. Revenue's Argument: The State argued that the petitioner failed to respond to the show cause notice issued by the Assessing Authority and did not produce any documents to substantiate its claim that the products/invoices in question pertained to non-GST items.