Hav Automobiles PVT. LTD. vs. The State Of Bihar

Held

The petitioner, through their counsel, sought permission to withdraw the present writ petition. This request was made under instructions from the petitioner. The petitioner sought to reserve their liberty to file a fresh petition on the same and subsequent cause of action. The Court granted this liberty. Consequently, the writ petition was disposed of as withdrawn, with the liberty granted to the petitioner to file a fresh petition. The Court also granted liberty to the petitioner to mention the matter for early listing. Any interlocutory applications filed in the petition were also disposed of.

Facts

HAV Automobiles Pvt. Ltd. (the petitioner) filed a writ petition before the Patna High Court challenging an order passed by the Assistant Commissioner of State Taxes, Patna Central Circle (respondent number 2). The impugned order, number 19314 dated 25.02.2020, was passed under Section 75(12) read with Section 50(2) of the Bihar Goods And Services Tax Act, 2017. A consequential demand notice/summary of order in form GST DRC-07 dated 29.02.2020 was also challenged. The petitioner contended that these orders were ex-parte and violative of natural justice, lacking jurisdiction due to the absence of necessary jurisdictional facts. The petitioner also argued that no interest liability should be attracted if tax liabilities were paid from the electronic credit ledger, citing a judgment from the Madras High Court.

Key Issues

1. Whether the order number 19314 dated 25.02.2020 and the consequential demand notice dated 29.02.2020, passed by the Assistant Commissioner of State Taxes, are ex-parte and violative of the principles of natural justice, rendering them unsustainable in law? 2. Whether the impugned order and demand notice are without jurisdiction due to the absence of the jurisdictional fact necessary for the exercise of power under Section 50 read with Section 75(12) of the Bihar Goods And Services Tax Act, 2017? 3. Whether the liability of interest under Section 50 of the Act is attracted only in cases where tax liability is discharged from out of the cash ledger, as held by the Madras High Court in Refex Industries Limited Vs. Asst. Commissioner of CGST and Central Excise, and consequently, whether no interest liability would be attracted if the credit balance in the electronic credit ledger is sufficient to meet admitted tax liabilities? Petitioner's Arguments: The petitioner argued that the impugned order was ex-parte and violated natural justice. They contended that the order was without jurisdiction as the necessary jurisdictional facts for invoking Section 50 read with Section 75(12) were absent. Furthermore, they relied on the Madras High Court's decision in Refex Industries Limited, asserting that interest under Section 50 is attracted only when tax is paid from the cash ledger, and not when sufficient credit is available in the electronic credit ledger to cover admitted tax liabilities. They also argued that if returns were filed and tax paid as per Section 39(7), no interest liability under Section 75(12) should arise. Revenue's Arguments: The judgment does not record any specific arguments made by the respondent revenue.