M/S Shree Sushruta Health Services Private Limited vs. The Union Of INDIA

Facts

The petitioner, M/s Shree Sushruta Health Services Private Limited, is a company providing healthcare services and claims to be covered under a statutory exemption notification. The petitioner challenges an order dated 27.08.2024 passed by the Deputy Commissioner of State Tax, Patna South2, Patna West, Bihar, imposing a tax liability of Rs. 15,02,440/- for the financial year 2019-20. The petitioner argues that for the financial year 2018-19, the same authority applied Notification No. 12/2017, Entry No. 74, and assessed zero tax liability, but failed to consider this circular for the 2019-20 period. The respondent State contended that the order for 2018-19 was passed later and that the petitioner did not appear during the adjudication for 2019-20, preventing the circular from being considered.

Held

The Court considered the prayer made in the writ application, the relevant Circular/Notification No. 12/2017 of the State Government, and the fact that the exemption is fundamental to the matter. Consequently, the Court found it appropriate to interfere with the impugned order. The Court set aside the impugned order dated 27.08.2024. The matter was remanded back to the Adjudicatory Authority to pass a fresh order in accordance with law. The Adjudicatory Authority was directed to provide due notice and an opportunity of personal hearing to the petitioner before passing the fresh order. This fresh order is to be passed within a period of three months from the date of the judgment. The Court did not expressly leave any issue undecided, as the matter was remanded for fresh adjudication.

Key Issues

1. Whether the impugned order dated 27.08.2024, imposing a tax liability of Rs. 15,02,440/- for the financial year 2019-20, is liable to be set aside in light of Notification No. 12/2017, Entry No. 74, which was applied for the financial year 2018-19 resulting in zero tax liability. Petitioner's arguments: The petitioner contends that they are covered under Notification No. 12/2017, Entry No. 74, which provides statutory exemption. They highlight that the respondent authority applied this very notification for the financial year 2018-19, assessing zero tax liability. Therefore, the failure to consider the same notification for the subsequent period (2019-20) is erroneous. Revenue/State's arguments: The State submits that the order for 2018-19 was passed subsequent to the order for 2019-20. They further argue that the petitioner did not appear for adjudication proceedings for 2019-20, due to which the relevant circular could not be placed before the authority, leading to the impugned order. The State agrees to a remand for passing a fresh order.