M/S Great Eastern Hire Purchase Private Limited vs. The State Of Bihar

Held

The Court accepted the reasons provided by Respondent No. 5 and Respondent No. 6 in their show cause replies, and therefore, decided not to proceed with contempt proceedings against them. The Court found that the statements made in the show cause replies remained uncontroverted as the petitioner did not file a rejoinder. Regarding the issue of interest and costs, the State respondents, through the learned Advocate General, agreed to pay simple interest at the rate of 9% per annum from the date of recovery of the amount till the date of refund to the petitioner. The Court directed the State respondents to make this payment within six weeks. Additionally, considering the illegal recovery and subsequent litigation, the Court directed the respondents to pay costs of Rs. 10,000/- to the petitioner within the same period. The Court also noted that it was open to the State Government to recover the interest and costs from the erring officials.

Facts

The petitioner, M/S Great Eastern Hire Purchase Private Limited, filed a writ application challenging orders passed by the Assistant Commissioner of State Tax (Respondent No. 5) and the Additional Commissioner of State Tax (Appeals) (Respondent No. 6). The High Court, in a prior judgment dated 06.05.2025, set aside these impugned orders (Annexures ‘P4’ and ‘P5’). Following this, the Court issued notices to Respondents 5 and 6 to show cause why interest and costs should not be awarded to the petitioner and why contempt proceedings should not be initiated against Respondent 6 for alleged willful disobedience of a previous court order in the case of SIS Cash Services. Respondents 5 and 6 filed their show cause replies, offering explanations and unconditional apologies.

Key Issues

1. Whether contempt proceedings should be initiated against the Additional Commissioner of State Tax (Appeals) (Respondent No. 6) for willful disobedience and disregard to the order of this Court passed in the case of SIS Cash Services (supra)? 2. Whether interest and costs should be awarded to the petitioner? Petitioner's Arguments: The petitioner sought interest and costs and initiation of contempt proceedings against the authorities for their actions. Revenue/State's Arguments: Respondent No. 5 argued that its order was passed after verifying from the GST portal and in terms of Section 73 of the GST Act, and that the judgment in SIS Cash Services was not brought to its notice. Respondent No. 6 argued that it had no knowledge of the SIS Cash Services judgment, as the petitioner's appeal was rejected because it was filed under an amnesty scheme applicable to orders under Sections 73 and 74, not Section 62. Both respondents offered unconditional apologies and explained the reasons for their actions.