M/S P.N.C. Infratech LTD. vs. The State Of Bihar

In present case, the petitioner has prayed for quashing of demand notice dated 23.05.2023 issued in Form GST DRC-07 for period 2021-2022 passed by respondent no. 3 whereby the tax, interest and penalty to the tune of Rs. 49,88,668.50/- have been imposed on the ground that the 2/7 petitioner has claimed excess Input Tax Credit in utter violation of the principle of natural justice. It further prays for quashing order dated 21.01.2025 passed by respondent no. 2 Additional Commissioner, State Taxes (Appeal) Patna West Division, Patna, whereby the appeal preferred by the petitioner under Section 107 of CGST/BGST Act, 2017 has been rejected on the ground that the petitioner has filed the appeal beyond the period of limitation.

Learned counsel for the petitioner submits that it is a registered person in Buxar circle, Buxar.

Learned counsel for the petitioner submits that at a sudden it received a summary of order-cum-demand notice raised under Section 73(9) issued in Form GST DRC – 07 for the period 2021-2022 whereby an amount of Rs. 49,88,668.50/- has been imposed against tax, interest and penalty.

Learned counsel for the petitioner submits that respondents have not issued any notices in terms of Section 169 of GST Act much less its uploading on the common portal, resulted in failure of the petitioner to submits its reply.

Learned counsel for the petitioner submits that against the impugned order dated 23.05.2023 the petitioner has preferred an appeal before the Additional Commissioner, State 3/7 Taxes (Appeal), Patna West Division, Patna but the same was dismissed vide order dated 21.01.2025 without going into the merit of the case, on the ground of limitation.

Learned counsel for the petitioner submits that impugned order dated 23.05.2023 has been passed without giving proper opportunity of hearing, explaining the facts and producing documents about the said differences. Further the learned Appellate Authority without hearing has been pleased to dismiss the appeal on the point of admission and merely on the ground of limitation.

Per contra, Mr. Vivek Prasad, learned G.P-7 appearing for the respondent department submits that the petitioner has availed input tax credit hugely in excess of its eligibility during the period 2021-2022 and detecting such discrepancy, the respondent adjudicating authority served a pre- show-cause notice in form ASMT-10 and on notice being unattended, the show cause notice was served in form DRC-01A dated 08.11.2022, the petitioner has furnished a reply on 22.11.2022, wherein it has admitted that it had availed ineligible input tax credit to the tune of Rs. 16,00,000/- each under CGST/BGST, and on account of heavy losses, it is unable to pay the tax dues.

Learned counsel for the respondent department further submits that as the reply of the petitioner was found unacceptable, the respondent adjudicating authority has served upon the petitioner a show cause notice dated 13.01.2023 followed by reminder dated 03.02.2023 but the petitioner neither acted upon nor responded to the show-cause notice, compelling the adjudicating authority to pass the impugned order dated 23.05.2023 imposing a demand of Rs. 49,88,668.50 against tax, interest and penalty.

Learned counsel for the respondent department further submits that the petitioner in its indolent approach has filed an appeal after a delay of more than one month and eleven days after due condonation of delay under the provision of Section 107 of BGST Act, 2017. The petitioner despite the grant of opportunity of hearing by the appellate authority on 09.08.2024, 21.08.2024, 19.10.2024 and 18.12.2024 failed to appear before the learned appellate authority to explain the delay in filing of the appeal. The delay of one month and eleven days excluding 120 days is beyond the power of learned appellate authority to condone.

Learned counsel for the respondent department further submits that against order dated 21.01.2025 passed by 5/7 the learned appellate authority, the petitioner has preferred the present writ application after a delay of almost three years of the adjudicating order and is fit to be rejected on the sole ground of delay.

Heard the parties, upon due appreciation of the respective submissions, this Court is of the opinion that the facts of the present case is squarely covered by Judgment dated 14.07.2026 passed by this Court in CWJC No. 6180 of 2026 (MK Traders Vs. The State of Bihar & Ors.). The relevant paragraph 10, 10.1, 10.2 and 10.3 are reproduced hereinbelow:- “10. Further coming to issue no. (ii), whether this Court has power under Article 226 to condone the delay beyond a period of 30 days within the meaning of Section 107(4) of the BGST Act 2017, has succinctly been answered by Hon’ble Supreme Court in the matter of Assistant Commissioner (CT) LTU, Kakinada and Ors Vrs. Glaxo Smith Kline Consumer Health Care Limited, reported in (2020)19 SCC 681.

The Bihar Goods and Services Tax Act 2017, is a special Act and provision of Section 162 bars the juri iction of civil Court, save as provided in Section 117 and 118 of the Act to deal with or decide any question arising from or relating to anything done or purported to be done under this Act. Section 117 of the Act mandates the High Court to exercise its Appellate juri iction against the order passed by the State Benches of the Appellate Tribunal constituted under Section 109. Section 117(2) provides for filing of appeal to High Court writ in 180 days and the proviso empowers is to condone the delay after appreciation of sufficient cause for not filing it within such prescribed period. The provision of Section 118 relates with appeal to Hon’ble Supreme Court from any order passed by 6/7 Principal Bench of the Appellate Tribunal.

Accordingly, provision of Section 162 bars the juri iction of civil Court in reference to Section 107 of the BGST Act and legislature in its wi om has restricted a limit of 30 days to Appellate Authority under Section 107(4), three months to Appellate Tribunal for filing appeal/45 days for filing memorandum of cross-objection under Section 112(6) and the High Court in exercise of its Appellate juri iction under Section 117(2) proviso of this BGST Act 2017, for condonation of delay in filing of an application before respective Forum.

Therefore, the condonation of delay by this Court in exercise of power under Article 226 of Constitution of India in filing of appeal under Section 107 of BGST Act 2017 in our opinion, will be against the legislative intent manifested in the provision of BGST Act 2017. It is true that High Court has wide juri iction under Article 226 of constitution of India but does not mean that it can disregard the substantive provision of a Statute. Accordingly, we come to the conclusion that this Court can’t entertain the present writ application filed after expiry of prescribed time limit.”

In present case, it is admitted position that show- cause notices along with the reminders were duly served to the petitioner. In fact, the petitioner has replied on 22.11.2022 and accepted the availment of the ineligible input tax credit to the tune of Rs. 16,00,000/-. This fact has not been controverted by the petitioner and subsequently failed to file any reply to the show-cause notice as well as reminder, compelling the respondent department to pass the impugned order dated 23.05.2023. The petitioner, in its indolent approach, has filed the belated appeal which was rejected on the ground of delay, as it 7/7 being beyond condonable limit of one month which in terms of judgment passed by this Court in the matter of MK Traders Vs. The State of Bihar & Ors. (Supra) is not entertainable and is dismissed.