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

Held

The petitioner sought permission to withdraw the writ petition, reserving liberty to file a fresh petition on the same and subsequent cause of action. The Court granted this liberty. Consequently, the petition was disposed of as withdrawn. No specific findings were made by the Court on the issues raised by the petitioner, as the matter was settled by withdrawal. The Court did not decide on the validity of the order, the jurisdictional aspect, or the interpretation of Section 50 and Section 75(12) of the Act in relation to interest liability. The operative direction was to dispose of the petition as withdrawn with liberty to file a fresh petition and to mention the matter for early listing. Any interlocutory applications were also disposed of.

Facts

HAV Automobiles Pvt. Ltd. (the petitioner) filed a writ petition before the Patna High Court challenging an order dated 25.02.2020 passed by the Assistant Commissioner of State Taxes, Patna Central Circle (the respondent). The petitioner sought to quash this order, arguing it was ex-parte and violative of natural justice. They also contended that the order and the consequential demand notice issued in form DRC-07 dated 29.02.2020 were without jurisdiction. The petitioner argued that the jurisdictional facts necessary for exercising power under Section 50 read with Section 75(12) of the Bihar Goods And Services Tax Act, 2017, were absent. They further relied on a judgment from the Madras High Court in Refex Industries Limited Vs. Asst. Commissioner of CGST and Central Excise, asserting that interest under Section 50 is only attracted when tax liability is discharged from the cash ledger, not from the electronic credit ledger when sufficient balance exists.

Key Issues

1. Whether the order dated 25.02.2020 passed by the respondent under Section 75(12) read with Section 50(2) of the Bihar Goods And Services Tax Act, 2017, is ex-parte and thus violative of the principles of natural justice? The petitioner argued that the order was passed without providing them an opportunity to be heard. 2. Whether the impugned order and the consequential demand notice are without jurisdiction and unsustainable in law? The petitioner contended that the jurisdictional facts required for the exercise of power under Section 50 read with Section 75(12) of the Act were not present. 3. Whether the liability of interest under Section 50 of the Act is attracted only when tax liability is discharged from out of the cash ledger, and not when there is a sufficient credit balance in the electronic credit ledger to meet admitted tax liabilities? The petitioner relied on the Madras High Court's decision in Refex Industries Limited Vs. Asst. Commissioner of CGST and Central Excise, arguing that no interest liability arises if returns are furnished and tax is paid in terms of Section 39(7) of the Act, with sufficient credit in the electronic ledger. The respondent's arguments were not recorded in the judgment.