M/S Vishwanath Iron Store vs. The State Of Bihar

Held

The Court noted the petitioner's contention that their case was covered by the judgment in M/s Commercial Steel Engineering Corporation. The Court directed the authorities to examine the issue and consider extending the benefits accorded to the petitioner in the aforementioned judgment to the present petitioner. The Court explicitly clarified that all issues regarding the petitioner's entitlement were left open for the authorities to consider. The petitioner was directed to approach the concerned authority within two weeks, and the authorities were expected to take a decision within four weeks thereafter. The Court also ordered that no coercive action would be taken against the petitioner until a decision was taken, provided the petitioner approached the authority within the stipulated period. The writ petition was disposed of with these observations and directions.

Facts

The petitioner, M/s Vishwanath Iron Store, filed a writ petition challenging a show cause notice issued by the Assistant Commissioner of State Tax, Sasaram Circle, Sasaram. The notice, dated July 1, 2019, was issued under Section 73 of the Bihar Goods and Services Tax Act, 2017, in Form GST DRC-01. The notice proposed to levy interest of Rs. 19,68,689.12/-. This interest was consequential to a claim of Input Tax Credit (ITC) amounting to Rs. 55,69,823.28/- being held inadmissible. The petitioner contended that the levy was without jurisdiction and contrary to the provisions of the Act, as there was no shortfall in the payment of tax or cess.

Key Issues

1. Whether the show cause notice dated July 1, 2019, issued under Section 73 of the Bihar Goods and Services Tax Act, 2017, proposing to levy interest of Rs. 19,68,689.12/- on account of inadmissible Input Tax Credit of Rs. 55,69,823.28/-, is without jurisdiction and in teeth of the provisions of the Act, particularly when there is no shortfall in payment of tax/cess? Petitioner's contention: The petitioner argued that their case is squarely covered by the directions issued in a previous judgment by the same High Court in CWJC No. 2125 of 2019, titled M/s Commercial Steel Engineering Corporation Versus The State of Bihar & Ors. They sought to avail the benefits granted in that judgment. Revenue's contention: The judgment does not record any specific argument from the revenue's side regarding the merits of the petitioner's claim or the validity of the show cause notice. However, the State's counsel agreed to a process of examination by the authorities.