M/S Vaishali Traders vs. The State Of Bihar

Held

The Court held that the writ application was not entertainable due to an inordinate delay of 16 months in filing. Furthermore, the Court found no reason to interfere with the impugned order dated 29.04.2024 passed by the Assistant Commissioner of State Tax under Section 73(9) of the BGST/CGST Act, 2017. The Court noted that the petitioner failed to provide a satisfactory reply and credible documentary evidence to substantiate their claim that the E-way bill was generated in error. Despite opportunities, including reminders, the petitioner did not adequately respond. The Court also observed that respondent no. 4, M/s Bindhyabasini Traders, did not appear before the Court to controvert the petitioner's submission regarding the erroneous E-way bill. The Court relied on its previous judgment in CWJC No. 6180 of 2026 (M.K. Traders Vrs State of Bihar & Ors.) which held that writ applications filed with unexplained delay, especially when statutory remedies are available, are not entertainable. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s Vaishali Traders, a proprietorship firm, challenged an order dated 29.04.2024 passed by the Assistant Commissioner of State Tax, Hajipur Circle, raising a liability of Rs. 2,12,15,656/- for tax, interest, and penalty under Section 73(9) of the BGST/CGST Act, 2017. The petitioner argued that the liability arose from an erroneous E-way bill entry for Rs. 5,78,47,634.33/- generated by their supplier, M/s Bindhyabasini Traders, against invoice no. I172249 on 14.06.2018, which did not correspond to any actual transaction or invoice. The revenue department contended that discrepancies were found during scrutiny of returns and GST portal data for 2018-19, leading to proceedings under Section 61 and subsequently Section 73 of the Act. The petitioner's reply was deemed unsatisfactory, and despite opportunities, no credible documentary evidence was provided.

Key Issues

1. Whether the E-way bill generated in error, without a corresponding invoice or actual movement of goods, can create a tax liability under the BGST/CGST Act, 2017, specifically concerning the proceedings initiated under Section 73? Petitioner's contention: The petitioner argued that the erroneous E-way bill entry for Rs. 5,78,47,634.33/- was an artificial inflation of their apparent turnover and did not represent any actual transaction or supply. They contended that the tax authorities relied on this erroneous data without proper verification, leading to an unjustified demand. They relied on the principle that a tax liability cannot arise from a fictitious transaction. Revenue's contention: The revenue department argued that discrepancies were identified between E-way bill data and filed returns (GSTR-3B) for the period 2018-19, indicating that tax charged as per inward E-way bills was not accounted for by either the supplier or the recipient. They initiated proceedings under Section 61 and then Section 73 based on these discrepancies, asserting that the petitioner failed to provide satisfactory evidence to rebut the findings. They also raised the issue of the petitioner's delay in filing the writ application and the existence of an alternative statutory remedy.