M/S Karlo Automobiles PVT. LTD. vs. The State Of Bihar

Held

The Court disposed of the petition based on the stand taken by the State in its affidavit dated January 9, 2021. The State clarified that following Notification No. 63/2020-Central Tax dated August 25, 2020, and a press release from the Ministry of Finance, no recoveries would be made for interest charged on delayed payments for past periods, irrespective of whether the tax was paid from the credit ledger or cash ledger. This decision was in line with the 39th GST Council meeting's decision, ensuring full relief to taxpayers. The Court took on record the averments made by the State, effectively resolving the dispute regarding past interest charges. The specific issue of installment payments under Section 80 and the quashing of the assessment order and bank attachment were implicitly addressed by this broader clarification on interest recovery, leading to the closure of proceedings.

Facts

The petitioner, M/s Karlo Automobiles Pvt. Ltd., filed a writ petition before the Patna High Court seeking several reliefs. These included acceptance of assessed demand in installments under Section 80 of the Bihar Goods and Services Tax Act, 2017, revocation of bank account attachment upon receipt of the first installment, quashing of an assessment order dated December 3, 2018, passed by the respondent assessing authority under Section 73(9) read with Section 50 of the Act for tax periods July 2017 to March 2018 and April 2018 to August 2018, and quashing of the consequential demand notice. The petitioner also sought to declare the attachment of its bank account on February 8, 2020, as illegal and arbitrary, alleging no prior notice was issued. The State, through its affidavit, agreed to certain clarifications regarding interest on delayed payments.

Key Issues

1. Whether the petitioner is entitled to pay the assessed demand in installments under Section 80 of the Bihar Goods and Services Tax Act, 2017? 2. Whether the order of assessment dated December 3, 2018, passed under Section 73(9) read with Section 50 of the Act for the tax periods July 2017 to March 2018 and April 2018 to August 2018, and the consequential demand notice are liable to be quashed? 3. Whether the attachment of the petitioner's bank account on February 8, 2020, is illegal, arbitrary, and violative of natural justice? Petitioner's Contention: The petitioner sought installment payments for the assessed demand and argued that the bank account attachment was illegal due to lack of prior notice. They also sought to quash the assessment order and demand notice. Revenue's Contention: The revenue, in its affidavit, clarified that in light of Notification No. 63/2020 dated August 25, 2020, and a press release from the Ministry of Finance, no recoveries would be made for interest charged on delayed payments for past periods, especially for tax paid through the credit ledger. They stated that interest on delayed payments made by debiting the cash ledger (net liability) would be applicable as per the amended Section 50(1).