M/S Shibbu Singh vs. The State Of Bihar

Held

The Court did not decide the merits of the case. Instead, it disposed of the petition by remanding the matter to Respondent No. 7, the Engineer in Chief, Rural Works Department, Government of Bihar, Patna. The Court directed Respondent No. 7 to consider and decide the petitioner's case in terms of the judgment and order dated 05.07.2019 passed in C.W.J.C. No. 1452 of 2019 (M/s Jai Bhawani Construction Vs. The Union of India and Ors.) and analogous cases, as well as Letter No. 5405 dated 30.07.2019. The Court clarified that all issues of fact and law were left open for determination by the said authority. The Court expressed hope that the decision would be made expeditiously, preferably within four months from the receipt of the order. No specific finding was given on the issues raised by the petitioner, as the matter was remitted for fresh consideration.

Facts

The petitioner, M/s Shibbu Singh, challenged appellate and assessment orders related to the financial year 2018-19 (specifically October 2018 to March 2019). The petitioner is a work contractor who allegedly paid tax in advance to the Rural Works Department. The Assistant Commissioner passed a summary assessment order under Section 74 of the Bihar GST Act, 2017, stating suppression of turnover and Nil turnover for the period. The petitioner's appeal against this order was rejected by the Additional Commissioner State Tax (Appeals). The petitioner sought quashing of these orders, a declaration that they were illegal and without jurisdiction, and reimbursement of GST amounts paid or to be paid, along with interest. The petitioner also sought the release/reimbursement of GST liability incurred for projects awarded by the Rural Works Department.

Key Issues

1. Whether the assessment order passed under Section 74 of the Bihar GST Act, 2017, for suppression of turnover and Nil turnover for the period October 2018 to March 2019, is arbitrary, illegal, and without jurisdiction, given that the petitioner, as a work contractor, had paid tax in advance to the Rural Works Department? (Question of law and fact, turning on Section 74 of the Bihar GST Act, 2017). Petitioner's arguments: The petitioner contended that the assessment order was misconceived, arbitrary, illegal, and without jurisdiction because they had admittedly paid tax in advance to the Rural Works Department, which should have been transferred to the State Taxes Department. They argued that they were being made liable for this despite paying in advance, leading to unjustified penalties. They also argued that deductions were made under the Bihar Value Added Tax Act before the GST Act was introduced, and the increased tax rate from 4% to 12% was being recovered from them instead of the Rural Works Department, which was without jurisdiction. Revenue's arguments: The State submitted that they had no objection with the matter being remanded to the appropriate authority for consideration of the petitioner's case on its own merits in accordance with law.