M/S Power Spectrum vs. The Union Of INDIA

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CWJC/17171/2024HC PatnaGSTCNR BRHC01102349202415 February 2025Bench: MR. JUSTICE P. B. BAJANTHRI,MR. JUSTICE SUNIL DUTTA MISHRA3 pages

AI SummaryAllowed

Facts

The petitioner, M/s Power Spectrum, a proprietorship firm, filed a writ petition before the Patna High Court challenging an order-in-original dated April 19, 2024, passed by the Assistant Commissioner, Central Goods and Services Tax (CGST) and Central Excise, Hqrs., Jamshedpur (Respondent No. 3). The impugned order imposed tax liabilities, interest, and penalties on the petitioner for the financial years 2014-15 to 2017-18 (up to June 2017) under the Finance Act, 1994. The petitioner contended that the order was passed arbitrarily and without adhering to statutory provisions and principles of natural justice. The amount in dispute is Rs. 9,61,876/-. The petitioner sought to quash the order and restrain coercive recovery actions.

Held

The Court allowed the writ petition. It held that the present case is squarely covered by the decision in M/s Kanak Automobiles Private Limited vs. Union of India and Ors. (C.W.J.C. No. 18398 of 2023), which was affirmed by the Hon'ble Supreme Court. Consequently, the impugned order dated April 19, 2024, was set aside. The Court's reasoning was based on the precedent established in the Kanak Automobiles case, indicating a procedural or substantive flaw in the impugned order that mirrored the issues in the cited case. The ratio decidendi is that if an order is found to be arbitrary and in violation of statutory provisions and principles of natural justice, and if a similar case with a comparable quantum of dispute has been decided in favor of the assessee by higher courts, then the impugned order should be quashed. The operative direction was to set aside the order-in-original.

Key Issues

1. Whether the order-in-original bearing No. 21/ST/AC/BGP/JSR(H)/2024 dated April 19, 2024, passed by the Assistant Commissioner, CGST and Central Excise, Hqrs., Jamshedpur, imposing tax liabilities, interest, and penalties for the financial years 2014-15 to 2017-18 (up to June 2017) under the Finance Act, 1994, is arbitrary and in violation of statutory provisions and principles of natural justice? Petitioner's Contention: The petitioner argued that the order-in-original was passed arbitrarily and without following the statutory provisions and principles of natural justice. They relied on a co-ordinate bench's order in the case of M/s Kanak Automobiles Private Limited vs. Union of India and Ors. (C.W.J.C. No. 18398 of 2023), which was affirmed by the Hon'ble Supreme Court, involving a similar quantum of money.

Sections Cited

Finance Act, 1994

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.17171 of 2024 ====================================================== M/s Power Spectrum, Sarbidipur, Kahalgaon, Bhagalpur, Bihar-813203 Proprietorship firm having its office at Sarbidipur, Kahalgaon, Bhagalpur, Bihar- 813203 through its Proprietor Abha Singh, aged about 61 years (Female), Wife of Kamal Kishore @ Kamal Kishore Singh, resident of village- Mahant Baba Mandir, Sarabadipur, P.S.- Kahal Gaon, District- Bhagalpur, Bihar-813203. ... ... Petitioner/s Versus 1. The Union of India, through the Chief Commissioner, of Central Goods and Service Tax (GST) and Central Excise (CX), Ranchi Zone, Patna. 2. The Assistant Commissioner, Central Goods and Services Tax (CGST) and Central Excise (CX), Division- Bhagalpur. 3. The Assistant Commissioner, Central Goods and Services Tax (CGST) and Central Excise (CX), Hqrs., Jamshedpur. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Rudra Pratap Singh, Advocate. : Mr. Aditya Prakash, Advocate. For the Respondent/s : Dr. Krishna Nandan Singh, Sr. Advocate. : Mr. Anshuman Singh, Sr. SC. CGST & CX. ====================================================== CORAM: HONOURABLE MR. JUSTICE P. B. BAJANTHRI and HONOURABLE MR. JUSTICE SUNIL DUTTA MISHRA

ORAL ORDER (Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI) 4 15-02-2025 In the instant petition, petitioner has prayed for following reliefs:- “a) To quash the impugned order-in- original bearing No.21/ST/AC/BGP/JSR(H)/2024 dated 19.04.2024 passed by the respondent no.3 2/3 whereby and whereunder tax liabilities, interest and penalties for the Financial Year 2014-15 to 2017-18 (up to June-17) were imposed against the petitioner under the Finance Act, 1994, in a most arbitrary manner without following the statutory provisions as well as the principles of natural justice. b) For issuance of appropriate direction restraining the respondents from taking any coercive action against the petitioner for the recovery of any amount of service tax, interest and penalty, in terms of the impugned order-in-original bearing No.21/ST/AC/BGP/JSR(H)/2024 dated 19.04.2024 passed by the respondent no.3 during the pendency of the present writ application.”

Co-ordinate Bench in identical matter passed order in favour of the petitioner in the case of M/s Kanak Automobiles No.18398 of 2023. It was affirmed by the Hon’ble Supreme Court while taking note of the quantum of the money involved. In the M/s Kanak Automobiles Private Limited case quantum of amount involved was around Rs.86,00,000/- whereas in the present case it is Rs.9,61,876/-.

In the light of these facts and circumstances, the present case is squarely covered by M/s Kanak Automobiles order dated 19.04.2024 stands set-aside.

3/3

Writ Petition is allowed.

ritik/- (P. B. Bajanthri, J) (Sunil Dutta Mishra, J) U

Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.