Patna High Court
M/S Suraj Agency vs The Union Of India on 25 June, 2025
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad, Ashok Kumar Pandey
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.3595 of 2025
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M/s Suraj Agency having its office at - Chaili Tar, Maharajganj, Patna-
800007 through its proprietor Lal Babu Choudhary (Male), aged about 61
years, S/o Late Suraj Prasad Choudhary, Resident of - Ward No. 51,
Chaudhary Tola, Pathar Ki Masjid, Main Road, Ashok Rajpath P.S.-
Sultanganj, District- Patna, Bihar.
... ... Petitioner
Versus
1. The Union of India Through the Secretary Department of Revenue, Industry
of Finance, North Block, New Delhi- 110001.
2. The Secretary Department of Revenue, Ministry of Finance, North Block,
New Delhi- 110001.
3. The State of Bihar through the Commissioner cum Secretary, Commercial
Tax Department, Govt. of Bihar, Patna.
4. The Commissioner Cum Secretary, Commercial Taxes Department, Govt. of
Bihar, Patna.
5. The Additional Commissioner of State Taxes (Appeals), East Division,
Patna.
6. The Assistant Commissioner State Taxes, Patna City West Circle, Patna
Bihar.
... ... Respondents
======================================================
Appearance :
For the Petitioner/s : Mr.Madan Kumar, Advocate
For the UOI : Dr. Krishna Nandan Singh, Sr. Advocate (ASGI)
Mr. Anshuman Singh, Sr. Standing Counsel
Mr. Shivaditya Dhari Sinha, Advocate
For the State : Mr. Vikash Kumar, SC-11
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CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE ASHOK KUMAR PANDEY
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 25-06-2025
In this writ application, the petitioner is seeking the
following reliefs:-
“(i) For issuing a writ of certiorari or any other
appropriate writ quashing/setting aside the assessment
order dated 06.12.2023 (Annexure-P/1) passed by
Respondent No.6 for the F.Y. 2018-19 whereby and
Patna High Court CWJC No.3595 of 2025 dt.25-06-2025
2/12whereunder the ex-parte assessment order has been
passed for the aforesaid period and thereby a total
liability of Rs.44,42,848/- (with breakup as -(a) Tax
worth Rs.22,89,337/- (b) Interest worth
Rs.19,24,959/- and (c) Penalty worth Rs.2,28, 552/-),
has been imposed on the petitioner;
(ii) For issuing a writ of certiorari or any other
appropriate writ quashing/setting aside the ex-parte
demand issued in form DRC-07 dated 06.12.2023
(Ref. No. ZD101223006107B) (Annexure-P/2) i.e. by
Respondent No.6 for the F.Y. 2018-19 whereby and
whereunder the demand order DRC 07 has been
issued under Sec 73(1) of the CGST/BGST Act, 2017
for the aforesaid year. Through the said DRC-07 a
demand has been raised for the aforesaid period a
total liability of Rs. 44,42,848/- (with breakup as -(a)
Tax worth Rs.22,89,337/- (b) Interest worth
Rs.19,24,959/- and (c) Penalty worth Rs.2,28,552/-),
has been imposed on the petitioner;
(iii) For issuing a writ of certiorari or any other
appropriate writ quashing/setting aside the Appellate
order bearing No. 571 dated 13.09.2024 (Annexure-
P/3) passed in Appeal Case No. AD100324000668L
by Respondent No.5 for the F.Y 2018-19 whereby and
whereunder the appellate authority i.e. Respondent
No.5 has rejected (affirming the original adjudication
order and demand) the appeal preferred by the
petitioner without considering the fact of case and
material available on record;
(iv) For issuing a writ of certiorari or any other
appropriate writ quashing/setting aside the APL-04
bearing No. ZD1009240101228 dated 17.09.2024
(Annexure-P/4) passed in Appeal Case No.
AD100324000668L by Respondent No.5 for the F.Y-
2018-19 whereby and whereunder the appellate
authority i.e. Respondent No.5 has rejected (affirming
the original adjudication order and demand) the
appeal preferred by the petitioner without considering
the fact of case and material available on record;
(v) For issuing a writ of mandamus or any other
appropriate writ directing the Respondents not take
any coercive action including recovery from bank
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account and third parties until pendency of the present
writ application;
(vi) For issuing writ of mandamus and thereby
directing the Respondents to refund a sum of
Rs.2,28,936/-{Rs.382/-(IGST); Rs.1,14,277/-(CGST);
Rs. 1,14,277/-/- (SGST)} for F.Y 2018-19, which was
deposited by the petitioner as 10% (ten percent) of
disputed tax amount as needed to be paid as pre-
deposit (Section 107(6)(b) of Central Goods and
Service Tax Act, 2017) before filing an appeal under
CGST/SGST for the aforesaid period i.e. F.Y-2018-
19;
(vii) For issuance of appropriate direction including
the mandamus directing the respondents to pass fresh
assessment order for the F.Y. 2018-19 upon
considering the invoices available with the petitioner
as also as on date mapping of GSTR-1, GSTR-3B and
GSTR-2A, GSTR-9 to ascertain the actual tax
liability, if any on the petitioner for the period 2018-
19;
(viii) For holding that the impugned assessment order
dated 06.12.2023 (Annexure P/1) and the appellate
order dated 13.09.2024 (Annexure P/3) have been
issued in most illegal manner by Respondent No.6
and 5 without examining the records and without
appreciating the supporting materials submitted
during the course of personal hearing; as also without
delving into the merit of the case;
(ix) For passing any such other order/orders as this
Hon’ble Court may deem fit and proper in the facts
and circumstances of the case.”
Brief facts of the case
2. It is the case of the petitioner that the impugned order
of assessment dated 06.12.2023 (Annexure-P/1) is an ex-parte
order without considering the stand of the petitioner. The further
submission is that the Assessing Officer (respondent no.6) has
not taken into consideration the GSTR-9 i.e. final return
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submitted by the petitioner in respect to the difference in turnover
which was wrongly declared in December 2018 month GST
return due to clerical error/typographical mistake.
Submissions on behalf of the petitioner
3. Learned counsel for the petitioner has submitted that
when the petitioner being aggrieved by the order, as contained in
Annexure-P/1, preferred an appeal before the Additional
Commissioner of State Taxes (Appeals)-respondent no.5, the
appellate authority rejected the appeal. According to the
petitioner, the appellate authority failed to appreciate that the
assessment for the aforesaid period was carried out on the basis
of disparity in turnover declared in GSTR-1 and GSTR-09
related to the petitioner, the turn over reconciliation with respect
to the alleged suppression of turnover submitted by the petitioner
was not considered by the respondent no.5 before issuing the
appellate order.
Submissions on behalf of the respondents
4. Learned ASG assisted by the Sr. Standing Counsel for
the CGST and CX has opposed the writ application. It is
submitted that the petitioner is registered with Patna City West
Circle of Commercial Taxes Department. The petitioner had filed
returns for the year 2018-19 but on comparison of GSTR-3B and
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GSTR-9, it was found that the petitioner has suppressed its
turnover to the tune of Rs.4,34,99,979.63/- and had not paid tax
thereon. It is further pointed out that the petitioner had claimed
input tax credit in excess of its eligibility as per GSTR-2A and
had also made delayed payment of tax. On detecting the
discrepancies, the respondent assessing authority issued notice in
form DRC-01 to the petitioner, asking it to show cause as to why
tax, interest and penalty should not be imposed.
5. It is submitted that the petitioner did not act and/or
respond to the notice. In ultimate analysis, the proceeding
resulted in imposition of impugned tax, interest and penalty
amounting to Rs.44,42,848/-.
6. As regards the appellate order, it is submitted that the
appellate authority has considered the entire submissions
advanced on behalf of the petitioner and has comprehensively
dealt with the same in the appellate order. In paragraph ’14’ of
the counter affidavit, it is stated inter-alia that the petitioner has
admitted that he had claimed input tax credit in excess of what
was reflected in GSTR-2A. In this view of the matter, the legal
action for violation of Section 16(2) of the CGST/BGST Act is
attracted. The constitutional validity of Section 16(2) has already
been upheld by this Court in M/S Aastha Enterprises Vs. the
Patna High Court CWJC No.3595 of 2025 dt.25-06-2025
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State of Bihar (CWJC No.10395 of 2023) in which this Court has
held that the claim of the input tax credit raised by the petitioner
in the said case would not sustain when the supplying/selling
dealer had not paid up the amounts to the Government; despite
collection of tax from the purchasing dealer. It is further
submitted that the petitioner has been given appropriate
opportunity of hearing by the appellate authority. It is pointed out
that at the stage of assessment admittedly the petitioner was
served with a show cause dated 21.09.2023 but he did not
respond to the said notice, therefore, the assessment order which
has already been upheld by the appellate authority cannot be said
to be in violation of principles of natural justice. The petitioner
had never requested for personal hearing before the respondent
assessing authority.
7. From the records, it appears that the copy of the counter
affidavit of respondent nos.5 and 6 was served upon the office of
the learned counsel for the petitioner as back as on 21.4.2025 but
no rejoinder to the same has been filed by the petitioner.
Consideration
8. Having heard learned counsel for the petitioner and
learned ASG for the respondent nos.5 and 6 as also on perusal of
the impugned orders as contained in Annexure-P/1 and P/3
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respectively, we find that the order under Section 73(9) read with
Rule 142(5) of the Central/Bihar Goods and Service Tax Act and
Rule, 2017 has been passed after the annual return furnished by
the petitioner for the financial year 2018-19 was selected for
scrutiny. The assessing authority noticed the suppression of
turnover, availment and utilization of input tax credit wrongly
and delayed payment of tax. The liability on these accounts were
quantified under the provisions of Section 73(1) of CGST/BGST
Act.
9. This Court further finds that the show cause notice was
issued to the petitioner calling upon him to show cause as to why
the total tax amount of Rs.22,89,337/- which includes IGST,
CGST and SGST amount of Rs.3813/- and Rs.11,42,762/- and
Rs.11,42,762/- respectively, short paid and wrongly
availed/utilized should not be recovered with applicable interest
under Section 50 of the CGST/BGST Act.
10. The specific statement made by the answering
respondents in paragraph ’10’ of the counter affidavit asserting
service of show cause notice upon the petitioner has not been
controverted by and on behalf of the petitioner. The assessing
authority proceeded to pass the impugned order as contained in
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Annexure-P/1 and upon determination of tax the petitioner has
been directed to pay the tax amount as mentioned hereinabove.
11. We have gone through the appellate order (Annexure-
P/3). It is found that the appellate authority has considered the
grounds of appeal. In respect of suppression of turnover, the
petitioner submitted that the mismatch in December 2018 return
showing sales as per GSTR-3B at Rs.4,83,03,934.70/- was due
to a clerical mistake. The actual sale for the period as per GSTR
1 in B2C was Rs.48,03,934.00/-. Thus, there was a difference of
Rs.4,35,00,000.00/- in the sales figure. Similarly, there was a
mismatch in January 2019 returns the sales as per GSTR 3B was
Rs. 29,00,239.28/-, exempted sales was at Rs.1,68,750.00/- and
the total sales for the period was Rs.30,68,989.28/- but as per
GSTR 1, in B2B it was Rs.4,35,626.48/- and as per B2C it was
Rs.20,05,429.00/-, the exempted sales was Rs. NIL which was
said to be by way of mistake of accountant. Total sales for the
period was Rs.24,41,055.48/-. Thus, the difference amount in
sale was Rs.6,27,933.80/- and the net differences was
Rs.4,41,27,934.50/-.
12. As regards the liability on account of excess ITC
claimed/utilized, the petitioner submitted that he is in possession
of a tax invoice or debit note issued by a supplier registered
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under the Act, against the goods or service received and paid the
amount during 180 days from the date of invoice. The
submission before the appellate authority was that in case of
Bharat Aluminium Company Vs. Union of India and others,
Chhattisgarh High Court relying on the proposition laid down by
Madras High Court in case of D.Y. Beathel Enterprises Vs. State
Tax Office (W.P. (MD) No.2147 of 2021, observed that if the
default is made by non-payment of tax by the seller, recovery
shall be made from the seller and only in exceptional
circumstances, it can be from the recipient, therefore the input tax
credit which was claimed by the petitioner cannot be denied for
the reason that the seller has not uploaded their invoice in time. It
is his submission that the provision allowing of input tax credit
on the basis of reflection in GSTR-2A was first introduced vide
notification No.49-Central Tax dated 09.10.2019 by inserting
clause 4 in rule 36 of CGST Rule 36(4). It was submitted that
the Rule is applicable from 09.10.2019 with allowing the gap of
20% and the same is not applicable for the financial year 2018-
19.
13. The above-mentioned ground raised by the petitioner
before the appellate authority has been discussed in detail in the
impugned appellate order. The appellate authority has recorded
Patna High Court CWJC No.3595 of 2025 dt.25-06-2025
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that on behalf of the appellant it was informed that the mistake in
the return of month of December, 2019 has been corrected in
GSTR-9 but the appellant did not produce any concrete
evidence/document such as sale register and the audit report.
14. The appellate authority has further found that the
appellant has availed the benefit of input tax credit in excess of
the amount shown in the GSTR-2A. In course of hearing the
appellant did not produce any evidence/document with respect to
the difference of amount found in the ITC availed by the
petitioner and the actual amount showing in GSTR-2. In this
connection, the appellate authority has reproduced the relevant
provision Section 16(2) of the CGST/BGST Act which lays down
the eligibility conditions for availing the input tax credit. The
appellate authority has quoted paragraph 4.1.2 of the Circular
No.183 dated 27.02.2022 issued by the government of India,
Department of Revenue (GST Policy Wing) in which the
clarifications have been given with regard to the differences up to
Rs. 5 lacs in respect of the ITC found in GSTR-2A and GSTR-
3B. The clarification as contained in paragraph 4.1.2 reads as
under:-
“4.1.2 In cases, where difference between the ITC
claimed in Form GSTR-3B and that available in
Form GSTR-2A of the registered person in respect of
Patna High Court CWJC No.3595 of 2025 dt.25-06-2025
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the proper officer shall ask the claimant to produce a
certificate from the concerned supplier to the effect
that said supplies have actually been made by him to
the said registered person and the tax on said
supplies has been paid by the said supplier in his
return in Form GSTR-3B.”
15. The appellate authority has found that the appellant
could not produce any evidence in terms of the clarifactory
circular dated 27.02.2022 read with Section 16(2) (a) (b) (c) and
(d).
16. In course of hearing, learned counsel for the petitioner
does not dispute that the statements made in paragraph ’14’ of the
counter affidavit which mentions admission of the petitioner as
regards his claim input tax credit in excess of what was reflected
in GSTR-2A, has not been denied.
17. The petitioner has statutory remedy of appeal before
the Tribunal, still the petitioner has chosen to move this Court in
its extraordinary writ jurisdiction. This Court is of the considered
opinion that the impugned orders are neither suffering from
violation of principles of natural justice nor this Court finds any
jurisdictional error committed by the respondent authorities. The
scope of interference with the impugned orders in the
extraordinary writ jurisdiction of this Court cannot be extended
so as to entertain the present writ application.
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18. This writ application is dismissed. However, the
petitioner will be at liberty to avail the alternative statutory
remedy which may be available to the petitioner in accordance
with law.
(Rajeev Ranjan Prasad, J)
(Ashok Kumar Pandey, J)
arvind/-
AFR/NAFR CAV DATE Uploading Date 01.07.2025 Transmission Date