Patna High Court
Mukesh Kumar Singh vs The State Of Bihar on 20 June, 2025
Author: P. B. Bajanthri
Bench: P. B. Bajanthri
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.5697 of 2022
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Mukesh Kumar Singh, R/o Ekderwan Masuriya, Post- Bhatha, Bhathna, P.S.-
Maker, Dist- Saran- 841215.
... ... Petitioner
Versus
1. The State of Bihar through the Commissioner cum Secretary of State Taxes,
Bihar, New Secretariat, Patna.
2. The Commissioner cum Principal Secretary of Finance, Govt. of Bihar,
Patna.
3. The Add. Commissioner of State Taxes (Audit), Saran Division, Chhapra.
4. The Add. Commissioner of State Taxes (Admin), Saran Division, Chhapra.
5. The Joint Commissioner of State Taxes, Saran Circle at Chhapra.
6. The Assistant Commissioner of State Tax, Saran Circle at Chhapra.
... ... Respondents
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Appearance :
For the Petitioner/s : Mrs. Usha Kumari, Advocate
Mr. Shashi Bhushan Singh, Advocate
For the State : Mr. Vivek Prasad, G.P.7
Ms. Supragya, AC to G.P.7
Ms. Roona, AC to G.P.7
Mr. Sanjay Kumar, AC to G.P.7
Mrs. Manisha Singh, AC to G.P.7
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CORAM: HONOURABLE MR. JUSTICE P. B. BAJANTHRI
and
HONOURABLE MR. JUSTICE S. B. PD. SINGH
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI)
Date : 20-06-2025
In the instant petition, the petitioner has prayed for
the following relief(s):
"(a) To issue a writ(s), direction(s)
particularly a writ in the nature of mandamus to
the respondents to quash the impugned ex-parte
reassessment order & demand notice dt-
31.03.2021
U/s 31 of VAT Act along with notice dt-
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10.02.2022 which was passed under time barred
proceeding and time barred & ex-parte audit
report of 2015-16 without knowledge of petitioner
and direction to the Add. C.S.T., Saran Division to
refund the excess amount of Rs.32,96,871.00 for
which he is only responsible.
(b) To issue writ/direction to the respondents
to consider the statutory obligation to refund the
excess TDS amount with interest as prescribed
under section 70 of the VAT Act, whereas, it is
specifically mentioned that where amount required
to be mentioned that where amount required to be
refunded by the prescribed authority to any person
is not refunded to him within the sixty days of the
amount having refundable, the prescribed authority
shall pay such person simple interest at the rate of
six percent.
(c) To grant any other relief (s) as the
petitioner is entitled for in the facts and
circumstances of the case.”
2. Brief facts of the case are that under the Bihar
Value Added Tax Act, 2005 (hereinafter referred to as ‘the Act,
2005’), the system of filing of return by the Firm is under
Section 26 and it relates to self-assessment of tax read with
Section 24. The petitioner filed returned for the year 2015-16 on
15.12.2016. Deadline for filing of return for the year 2015-16 is
31.12.2016. Respondents have invoked Sub-Section 2 of
Patna High Court CWJC No.5697 of 2022 dt.20-06-2025
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Section 26 while selecting the petitioner’s firm for the purpose
of audit and audit was conducted. They have noticed certain
discrepancies and proceeded to conduct audit on 16.12.2019
(Annexure-2). Further notice was issued on 26.12.2020 for
appearance of the petitioner on 13.01.2021 at 11.00 A.M. The
petitioner remained absent, resultantly, the concerned Authority
proceeded to pass order on 01.12.2021. Hence, the present
petition.
3. Learned counsel for the petitioner submitted that
Notice dated 26.12.2020 was not served in the manner known to
the law. It is submitted that email is stated to have been sent, the
same has not been received by the petitioner. It is further
submitted that impugned action of the Respondent are contrary
to Sub-Section 3 of Section 26 read with Sub-Section 3 of
Section 24 of the Act, 2005 to the extent that within 36 months
from the date of deadline for the year 2015-16 that is with effect
from 31.12.2016 is required to be calculated, whereas the order
has been passed on 31.03.2021 under Section 31 of the Act,
2005. It is also submitted that petitioner need not exhaust
statutory remedy of appeal before the Appellate Authority or
tribunal in the view of the fact that Respondents have no
jurisdiction to pass order under Section 31 in the light of Sub-
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Section 3 of Section 26 read with Sub-Section 3 of Section 24 of
the Act, 2005 to the extent of jurisdiction of the concerned
Authority after 31.12.2019 (the date is required to be calculated
from 31.12.2016 for a period of 36 months). Hence, the
impugned orders are liable to be set aside.
4. Per contra, leaned counsel for the Respondents
resisted the aforementioned contention and submitted that
Notice has been served to the petitioner through registered post
under acknowledgment to that effect he had furnished original
record among other registered post under acknowledgment has
been sent to the petitioner Mukesh Kumar Singh. It is further
submitted that reading of Sub-Section 3 of Section 26, Sub-
Section 3 of Section 24 read with Section 31, 36 months is
required to be calculated from the date of audit i.e., 16.12.2019.
Therefore, the petitioner has not made out a case so as to
interfere with the impugned action of the Respondent on the
question of the fact that officials have violated Sub-Section 3 of
Section 26 read with Sub-Section 3 of Section 24 of the Act,
2005.
5. Heard learned counsel for the respective parties.
Undisputed facts are that the petitioner had filed return for the
year 2015-16 on 15.12.2016 under the self-assessment.
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Randomly, the official Respondents have taken the petitioner’s
return for the purpose of auditing under Sub-Section 3 of
Section 24 and proceeded to audit the matter on 16.12.2019,
thereafter, they proceeded to issue Notice on 26.12.2020 for the
appearance of the petitioner on 13.01.2021 at 11.00 A.M. It was
not served on the petitioner. On the other hand, it is evident
from the original record that official Respondents have
communicated notice through the registered post under
acknowledgment. The next question would be whether official
Respondents have violated in completing the process of audit
and in passing final order under Sub-Section 26(3) read with
Sub-Section 3 of Section 24 read with Section 31 or not? It is
necessary to re-produce Section 26(3), 24(3) and 31, which are
as follows:
“26 (3) The audit of a dealer selected under sub-
section (2) shall be conducted, in the manner prescribed,
within a period of thirty six months from the due date
within the meaning of sub-section (3) of section 24.
24 (3) Every registered dealer shall furnish to the
prescribed authority, on or before the due date, a true
and complete return in respect of every financial year in
the form and manner prescribed.
Explanation: In this sub-section, “due date” means —
(a) the 31st day of December of the year following
the year to which such return relates in the case of the
following classes of dealers:
(i) a company within the meaning of
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(ii) a person, other than a company,
whose accounts are required, under this Act
or under any other law, to be audited or
where the report of an accountant is
required to be furnished under section 54;
(b) the 31st day of July of the year following the
year to which such return relates, in any other cases.
31. Assessment or Re-assessment of Tax of
escaped turnover. – (1) If the prescribed authority is
satisfied, either on the basis of audit conducted under
sub-section (3) of section 26 or otherwise, that
reasonable grounds exist to believe that, in respect of any
assessment under this Act or under the Bihar Finance
Act, 1981, (Bihar 5 of 1981) as it stood before its repeal
by section 94, during any period, any sale or purchases of
goods liable to tax under this Act or the said Act, for any
reason, has been under-assessed or has escaped
assessment, or has been assessed to tax at a lower rate,
or any deduction there from has been wrongly made, or
an input tax credit has incorrectly been claimed, the
prescribed authority shall, in such manner as may be
prescribed and after serving on the dealer a notice in the
form and in the manner prescribed, proceed to assess or
re-assess, as the case may be, the tax payable by such
dealer within four years from the expiry of the year
during which the original order of assessment or re-
assessment was passed, in a case where the dealer has
concealed, omitted or failed to disclose full and correct
particulars of such sale or purchase or input tax credit,
and the provisions of this Act shall, so far as may be,
apply accordingly as if the notice under this sub-section
was a notice under section 27:
Provided that the amount of tax shall be assessed
or re-assessed after allowing such deductions as were
allowable during the said period and at the rates at
which it would have been assessed had the turnover not
escaped assessment.
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where the dealer has concealed, omitted or failed to
disclose full and correct particulars of such sale or
purchase or input tax credit, direct that the dealer shall,
besides the amount of interest payable under sub-section
(10) of section 24, pay by way of penalty a sum equal to
three times the amount of tax which is or may be assessed
on the turnover of sale or purchase which escaped
assessment.
(b) The penalty imposed under clause (a) shall be
in addition to the amount of tax, which is or may be
assessed on the turnover of sale or purchase which
escaped assessment.
(c) No order shall be passed under this sub-section
without giving the dealer a reasonable opportunity of
being heard.
(3) Any assessment or re-assessment made and any
penalty imposed under this Section shall be without
prejudice to any action, which is or may be taken under
Section 81.”
6. Reading of Sub-Section 3 of Section 26 of the
Act, 2005, it is evident that time limit stipulated is for a period
of 36 months from the due date within the meaning of Sub-
Section 3 of Section 24 of the Act, 2005. Sub-Section 3 of
Section 24 due date has been dealt under the heading of
explanation and it is consisting of two dates, which are required
to be taken note of for the purpose of due date namely 31 st
December of the year and 31st July of the year. In the present
case, having regard to the fact that return has been filed on
15.12.2016 and the deadline being 31.12.2016 for the year
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2015-16, 36 months is required to be calculated from 31st
December, 2016 and it would be up to 31 st December, 2019. No
doubt, auditing has been taken while invoking Sub-Section 3 of
Section 26 on 16.12.2019. However, the order has been passed
on 31.03.2021. It is to be noted that under Sub-Section 26(3)
there is no time limit stipulated independently for auditing,
issuance of notice and its completion insofar as passing final
order. In the absence of such time limit stipulation, one cannot
draw inference that 36 months is required to be taken note of
from the date of audit. In the present case, audit is being taken
on 16.12.2019 with reference to filing of return on 15.12.2016
for the year 2015-16. Therefore, the contention of the
Respondent cannot be accepted that 36 months is required to be
calculated from the date of audit and not from the date of
deadline (due date) for the concerned year.
7. Learned counsel for the Respondents submitted
that petitioner has statutory remedy of appeal before the
Appellate Authority and further Second Appeal. The same
cannot be examined in the present case for the reasons that
official Respondents, who have initiated & completed
proceeding (impugned action) are beyond the time limit
stipulated under Sub-Section 3 of Section 26 of Act, 2005 read
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with Sub-Section 3 of Section 24 of the Act, 2005. At this stage,
it is necessary to take note of Hon’ble Supreme Court decision
in the case of Tamil Nadu Cements Corporation Limited
Versus Micro and Small Enterprises Facilitation Council and
Another reported in (2025) 4 Supreme Court Cases 1 : 2025
SCC OnLine SC 127 in which the Hon’ble Supreme Court has
laid down the principles for entertaining Writ petition in the
absence of exhausting statutory remedy and they are four in
number i.e. “(a) the writ petition has been filed for the
enforcement of a fundamental right protected by Part III of the
Constitution; (b) there has been a violation of the principles of
natural justice; (c) the order or proceedings are wholly without
jurisdiction; or (d) the vires of a legislation is challenged.”
8. The present case would fall under clause-(c) to
the extent that petitioner in not exhausting statutory remedy and
the fact that the official Respondents have no jurisdiction
beyond 31.12.2019 with reference to date of filing of return on
15.12.2016 for the year 2015-2016. In such circumstances, the
aforementioned decision of the Hon’ble Supreme Court aptly
applicable to the case in hand insofar as objection raised by the
State Respondents to the extent that the petitioner has statutory
remedy before the Appellate Authority and further Section
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Appeal. Accordingly, the aforementioned contention of the
Respondents stands rejected.
9. In view of these facts and circumstances, the
petitioner has made out a case so as to interfere with the
impugned action of the Respondents. Accordingly, the
impugned order & demand notice dated 31.03.2021 along with
Notice dated 10.02.2022 stands set aside. The petitioner is at
liberty to approach the concerned authority to seek
consequential benefits, if any. The concerned authority is hereby
directed to redress the consequential benefit in accordance with
law, within a period of 03 (Three) months.
10. Writ petition stands allowed.
(P. B. Bajanthri, J)
( S. B. Pd. Singh, J)
manish/-
AFR/NAFR A.F.R. CAV DATE N.A Uploading Date 24.06.2025 Transmission Date N.A