M/S Creative Industrial Security Forces (P) LTD. vs. The State Of Bihar

Held

The Court held that the service of the show-cause notice and reminders on the common GST portal constituted sufficient compliance with Section 169 of the BGST/CGST Act, 2017. The Court found that the petitioner failed to file any reply to the show-cause notice and also failed to appear for the scheduled personal hearings, which compelled the respondent department to pass the impugned order under Section 73(9). The Court rejected the petitioner's contention that they only became aware of the order upon receiving a recovery notice, noting that the notices and order were uploaded on the common portal prior to the order's issuance. Crucially, the Court found that the petitioner had an alternative remedy of appeal under Section 107 of the BGST/CGST Act, 2017, but failed to avail it. The writ application was filed after a delay of approximately 11 months beyond the statutory period for filing an appeal. Citing its own judgment in M.K. Traders Vs. The State of Bihar & Ors. and Supreme Court judgments, the Court held that a writ petition filed with such a significant delay, ignoring the statutory alternative remedy, is not entertainable under Article 226 of the Constitution of India. Therefore, the writ application was dismissed.

Facts

The petitioner, M/s Creative Industrial Security Forces (P) Ltd., a company with separate GST registrations in Bihar and Jharkhand, filed a writ petition challenging an ex-parte assessment order dated 19.02.2025 passed by the Assistant Commissioner of State Taxes (Respondent No. 4) for the period 2020-2021. The petitioner contended that the order was passed without proper opportunity of hearing under Section 75(4) and without valid service of show-cause notice under Section 169 of the BGST/CGST Act, 2017. The petitioner also claimed to have filed nil GSTR-3B returns for Bihar for the period as there was no business, and all applicable taxes were paid in Jharkhand. The revenue department argued that the petitioner was served with show-cause notices and reminders on the common portal, which constitutes valid service under Section 169(1)(d), and that the petitioner failed to appear for personal hearings. The department also pointed out the availability of an alternative remedy of appeal under Section 107 of the BGST/CGST Act, 2017.

Key Issues

1. Whether the ex-parte assessment order dated 19.02.2025, passed by the Assistant Commissioner of State Taxes for the period 2020-2021, is liable to be quashed for non-compliance with the principles of natural justice, specifically the lack of opportunity of hearing as contemplated under Section 75(4) of the BGST/CGST Act, 2017? 2. Whether the show-cause notice dated 19.11.2024 and subsequent reminders were validly served upon the petitioner in accordance with Section 169 of the BGST/CGST Act, 2017? 3. Whether the writ petition is maintainable given the availability of an alternative statutory remedy of appeal under Section 107 of the BGST/CGST Act, 2017, and the delay in filing the writ petition? Petitioner's Arguments: The petitioner argued that the assessment order was passed ex-parte without granting any opportunity of hearing as required by Section 75(4) and without proper service of the show-cause notice under Section 169. They also contended that they had filed nil returns for Bihar for the period 2020-2021 and paid all applicable GST in Jharkhand. Revenue's Arguments: The revenue department contended that the petitioner was duly served with the show-cause notice and reminders on the common GST portal, which is a valid mode of service under Section 169(1)(d). They asserted that the petitioner failed to file a reply or appear for personal hearings, leading to the ex-parte order. The department also argued that the writ petition was not maintainable due to the availability of an alternative remedy under Section 107 and the significant delay in filing the writ petition.