M/S Bhawani Motors (A Partnership Firm) vs. The Union Of INDIA
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The petitioner, M/s Bhawani Motors, a partnership firm engaged in the automobile business, filed a writ petition challenging an order dated 31.12.2025 passed by the Assistant Commissioner of State Tax, Darbhanga Circle (respondent no. 5). The petitioner alleged that the order imposed a liability of Rs. 15,50,936/- for the period 2021-22 without considering their show cause reply and without providing an opportunity for personal hearing. The petitioner sought to restrain the respondent department from issuing DRC-13 and initiating recovery proceedings. The petitioner had previously received a notice dated 23.07.2025 regarding audit discrepancies, filed a reply on 30.07.2025, and subsequently received a notice in Form GST ADT-02. A show cause notice in Form DRC-01 was issued on 26.09.2025 proposing a tax amount of Rs. 40,78,852/-, to which the petitioner replied on 26.12.2025.
Held
The Court held that the present case was not an exceptional one warranting interference under writ jurisdiction. It found that the petitioner had been afforded an opportunity of hearing, and their reply had been considered by the respondent no. 5 before passing the detailed order dated 31.12.2025. The Court noted that the petitioner had moved the High Court within the statutory period for filing an appeal under Section 107 of the CGST/BGST Act, 2017. Consequently, the Court disposed of the writ application by granting liberty to the petitioner to file an appeal against the impugned order within a period of 4 weeks from the date of receipt of a copy of the order, if they were so advised. The Court did not expressly leave any issue undecided, but by directing the petitioner to avail the appellate remedy, it implicitly deferred a final decision on the merits of the case.
Key Issues
1. Whether the impugned order dated 31.12.2025 passed by respondent no. 5 is liable to be set aside for non-consideration of the petitioner's show cause reply and for denial of personal hearing, as mandated by the CGST/SGST Act, 2017? Petitioner's Contention: The petitioner argued that the impugned order was passed without properly considering their detailed reply to the show cause notice and without affording them an opportunity for a personal hearing, thus violating principles of natural justice and statutory provisions. They sought a direction to set aside the order and restrain recovery proceedings. Respondent's Contention: The respondent department contended that the petitioner was provided with a proper opportunity of hearing and that their reply was considered. They further argued that an alternative remedy of appeal under Section 107 of the CGST/BGST Act, 2017 is available to the petitioner, and therefore, the writ application should be dismissed on this ground.
Sections Cited
Section 65, Section 73, Section 107, Rule 101, Rule 142
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Cause title — parties, addresses and appearances
ORAL ORDER (Per: HONOURABLE MR. JUSTICE VIKASH KUMAR) 2 15-07-2026 Heard Sri Anurag Saurav, learned counsel for the petitioner and Sri Ram Krishna, Senior Standing Counsel alongwith Ms. Ruchi Mandal, advocate and Sri Ravish Chandra, for the respondent department.
In the present writ application, the petitioner has prayed for direction for setting aside order dated 31.12.2025 2/5 passed by respondent no.5 whereby without considering and recording finding on the show cause reply filed by the petitioner and without providing opportunity of personal hearing to the petitioner, a liability of Rs. 15,50,936/- has been imposed under CGST/SGST Act, 2017 for period 2021-22. It further prays for restraining the respondent department from issuance of DRC-13 and initiating recovery proceeding for recovery of tax amount through the bank account attachment.
Learned counsel for the petitioner submits that petitioner is a partnership firm and, as a registered firm, is engaged in the business of automobiles.
Learned counsel for the petitioner submits that for period 2021-22, it received a notice dated 23.07.2025, seeking clarification on the discrepancies found during audit to which it has filed its reply on 30.07.2025 (it forms as Annexure P/3 to the writ application) and, subsequent to it, the authority issued a recommendation for conducting a detailed enquiry at the Circle and a demand for payment of Rs. 36,96,648/- and in this regard, a notice dated 04.09.2025 in Form GST ADT-02 under Section 65(6) read with Rule 101(5) of BGST/CGST Rules, 2017 was issued to the petitioner.
Learned counsel for the petitioner submits that 3/5 respondent no.5, on the basis of audit objection and recommendation, initiated a proceeding under Section 73(1) of the BGST Act, 2017 and issued a show cause notice in Form DRC-01 dated 26.09.2025, read with Rule 142 (1A) of BGST Rules, proposing a tax amount of Rs. 40,78,852/- and was asked to submit its reply by 26.10.2025. 6. Learned counsel for the petitioner submits that on 26.12.2025, it has submitted its reply to the show cause notice dated 26.09.2025, and without considering the show cause reply and document including books of account submitted by the petitioner, the respondent no.5 rejected the claim of the petitioner vide order dated 31.12.2025, imposed an amount of Rs. 8,77,754/-, 5,92,484/- and 11,450/- as tax, interest and penalty under CGST/SGST Act, 2017 respectively.
Per contra, Mr. Ravish Chandra, learned counsel appearing for the respondent department submits that proper opportunity of hearing has been adduced to the petitioner and on proper consideration of the reply submitted by the petitioner in pursuance of notice in Form ADT-01, the Audit Authority has recommended for initiation of proceeding under Section 73 of the CGST/BGST Act, 2017. The proper officer upon being satisfied, has issued a notice under Section 73(1) of 4/5 CGST/BGST Act, 2017. The petitioner has submitted its reply and the respondent no.5 has taken into account the point-wise reply submitted by the petitioner and after threadbare consideration, has passed the detailed order dated 31.12.2025. 8. Learned counsel for the respondent department further submits that against the impugned order dated 31.12.2025, the petitioner has an alternative remedy of appeal under the provision of Section 107 of the CGST/BGST Act, 2017 and on the ground of availability of alternative remedy, the present writ application may be rejected.
Heard the parties. After due consideration of the respective submissions, it is apparent that the present case is not an exceptional case and proper opportunity of hearing has been adduced to the petitioner to which the petitioner has replied and upon due consideration of the point-wise reply, the respondent no.5 has passed the detailed order on 31.12.2025. The petitioner has moved before this Hon’ble Court within the statutory period for filing of appeal under Section 107 of the CGST/BGST Act, 2017. 10. Accordingly, the present writ application is disposed of with liberty to the petitioner to file an appeal against the order dated 31.12.2025 passed by respondent no.5 under 5/5 Section 73 of the CGST/BGST Act, 2017, if so advised, within a period of 4 weeks from the date of receipt of a copy of this order.
Ashwin/- (Anil Kumar Sinha, J) ( Vikash Kumar, J) U
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.