M/S Shibbu Singh vs. The State Of Bihar

Held

The Court disposed of the writ petition by directing Respondent No. 7, the Engineer in Chief, Rural Works Department, Government of Bihar, Patna, to consider and decide the petitioner's case in terms of the judgment and order dated July 5, 2019, passed in C.W.J.C. No. 1452 of 2019, and the letter No. 5405 dated July 30, 2019. The Court clarified that all issues of fact and law were left open for consideration by the said authority. The Court expressed hope that the Engineer in Chief would decide the case expeditiously, preferably within four months from the date of receipt of a copy of the order. The operative direction was to remand the matter to the Engineer in Chief for fresh consideration based on the cited judgment and letter. No specific findings were made on the merits of the petitioner's claims regarding the illegality of the assessment order or the recovery of GST rates, as these were left open for the authority to decide.

Facts

The petitioner, M/s Shibbu Singh, filed a writ petition challenging an appellate order dated January 6, 2022, passed by Respondent No. 4 (Additional Commissioner, State Tax (Appeals)), which affirmed an order dated March 9, 2020, passed by Respondent No. 7 (Assistant Commissioner, State Taxes). The original order by Respondent No. 7, issued under DRC 07, was a summary assessment order for the period April 2019 to September 2019, stating a Nil turnover for the period January 1, 2019, to September 30, 2019. The petitioner argued that as a work contractor, tax was paid in advance to the Rural Works Department, which should have been transferred to the State Taxes Department, but instead, the petitioner was made liable for huge penalties. The petitioner also contended that deductions were made under the Bihar Value Added Tax Act before the GST regime, and the increased tax rate from 4% to 12% was being recovered from the petitioner instead of the Rural Works Department.

Key Issues

1. Whether the assessment order issued by the State Taxes Department is arbitrary, illegal, and without jurisdiction, considering the petitioner, as a work contractor, had paid tax in advance to the Rural Works Department which was allegedly not transferred to the State Taxes Department, leading to the petitioner being held liable for penalties? (Section 74, Bihar GST Act 2017) 2. Whether the recovery of the increased GST rate (from 4% to 12%) from the petitioner, instead of the Rural Works Department, is without jurisdiction, given that deductions were made under the Bihar Value Added Tax Act prior to the introduction of the GST Act? Petitioner's Arguments: The petitioner argued that the assessment order was misconceived and illegal because tax was paid in advance to the Rural Works Department, which should have been transferred to the State Taxes Department. The petitioner claimed to be unjustly held liable for penalties. Furthermore, the petitioner contended that the increased GST rate was being recovered from them instead of the Rural Works Department, despite deductions being made under the previous VAT regime. The petitioner relied on a judgment dated July 5, 2019, in C.W.J.C. No. 1452 of 2019 (M/s Jai Bhawani Construction Vs. The Union of India and Ors.) and a letter dated July 30, 2019, issued by the Engineer-in-Chief. Revenue's Arguments: The State submitted that it had no objection to the matter being remanded to the appropriate authority for consideration of the petitioner's case on its own merits in accordance with law.