M/S. Greentech Auto LLP vs. The State Of Bihar

Held

The Court held that against the order dated 21.05.2025 passed by the Appellate Authority, the petitioner has a statutory remedy of a second appeal under Section 112 of the BGST Act, 2017. While acknowledging that the GST Tribunal is not yet duly constituted, the Court agreed with the State's submission that the petitioner can avail this remedy as and when the Tribunal is constituted, following precedents set by the Court. The Court also directed that if the petitioner requires a stay on the demand arising from the impugned order, they may approach the competent authority, who shall consider the request upon deposit of 10% of the demand amount. Regarding the challenge to the orders dated 03.08.2024 and 05.09.2024, the Court advised the petitioner to avail their statutory remedy under Section 107 of the BGST Act, 2017, if they are so advised. If such an appeal is preferred within 30 days from the date of the order, the Appellate Authority shall consider it, keeping in mind that the petitioner was pursuing their remedy before the High Court, and pass an appropriate order within a reasonable period. The writ application and the interlocutory application were disposed of with these observations.

Facts

The petitioner, M/s. Greentech Auto LLP, filed a writ petition challenging an order dated 21.05.2025 passed by the Additional Commissioner of State Tax (Appeals), which rejected their appeal against a refund rejection order dated 13.11.2023 by the Joint Commissioner of State Tax. The rejected refund amount was Rs. 12,56,341/-. This was the second round of litigation. In the first round (CWJC No. 16656 of 2024), the petitioner sought to keep in abeyance orders dated 03.08.2024 and 05.09.2024, which directed recovery of Rs. 28,40,366/- and Rs. 57,18,156/- respectively, along with interest and penalty, for periods April 2023 to September 2023 and April 2022 to March 2023, on grounds of modus operandi. The High Court had directed the Appellate Authority to decide the pending appeal expeditiously and kept the recovery orders in abeyance until then. The present petition also challenges these recovery orders, which were not directly under challenge in the first writ.

Key Issues

1. Whether the petitioner has a statutory remedy against the order dated 21.05.2025 passed by the Appellate Authority rejecting the refund appeal, and if so, what is that remedy? (Section 112 of BGST Act, 2017) 2. Whether the petitioner can challenge the orders dated 03.08.2024 and 05.09.2024, which directed recovery of input tax credit along with interest and penalty, in the present writ petition, given that these were not directly challenged in the earlier writ petition and statutory remedies exist? (Section 107 of BGST Act, 2017 and principle of constructive res judicata) Petitioner's arguments: The petitioner sought to set aside the appellate order and allow the refund on merit. They also sought to keep the recovery orders dated 03.08.2024 and 05.09.2024 in abeyance, arguing they were defective as they went beyond the show-cause notice and submissions made. They also sought a stay on coercive action until the finality of the issue. Revenue's arguments: The State contended that the petitioner has a remedy of a second appeal under Section 112 of the BGST Act against the appellate order. They also argued that challenging the recovery orders dated 03.08.2024 and 05.09.2024 in the present writ petition is barred by the principle of constructive res judicata, as these orders could have been challenged in the earlier writ petition.