Case Law Details
Kishan Cement Stores Vs State of Bihar (Patna High Court)
GST Detention Proceedings Held Concluded After Voluntary Payment of Tax and Penalty; Patna HC Refuses Relief Where Taxpayer Bypassed Statutory GST Appeal Mechanism; GST Penalty Challenge Rejected Because Goods Were Released After Taxpayer Accepted Demand; Patna HC Declines Refund of GST Penalty Paid During Goods Detention Proceedings.
The petitioner filed a writ application before the Patna High Court seeking quashing of a Summary of Show Cause Notice for penalty in Form GST DRC-01 and Show Cause Notice in Form GST MOV-07 dated 13.10.2025 issued under the CGST/BGST Act, 2017. The petitioner contended that the notices were issued without granting an opportunity of hearing under Section 129(4) of the Act and were therefore violative of principles of natural justice.
The petitioner also argued that the detained goods were accompanied by a valid tax invoice and E-way bill, which had expired during transportation due to a technical snag in the vehicle. It was contended that there was no intention to evade tax and that the E-way bill could not be extended in time because the vehicle was already in transit. The petitioner further sought refund of the penalty amount of Rs.2,00,090/- paid under the CGST/BGST Act along with interest, claiming that the payment had been made under duress because the goods were urgently required for business purposes.
The Court noted that while making the payment of penalty, the petitioner had not raised any protest.
The State relied upon Form GST MOV-05 dated 13.10.2025, which was a release order issued by the Deputy Commissioner of State Tax. The release order recorded that the goods vehicle carrying the goods had been inspected, an order of detention in Form GST MOV-06 had been issued, and a notice in Form GST MOV-07 had been served on the person in charge of the conveyance. The release order further stated that the owner or person in charge of the conveyance had come forward and made payment of tax and penalty as proposed, following which the goods and conveyance were released in good condition on 13.10.2025.
On the basis of the release order, the State argued that under Section 129(5) of the CGST Act, payment of the tax and penalty amount resulted in conclusion of all proceedings relating to the notice issued under Section 129(3). According to the State, the proceedings had concluded on 13.10.2025 itself. The State further pointed out that the writ application had been filed nearly four months after conclusion of the proceedings. It was submitted that if the petitioner was aggrieved by the penalty order, the proper course was to file an appeal within the prescribed period of three months. Since no appeal had been filed, the State argued that such writ petitions should be discouraged.
After considering the facts and circumstances, the High Court held that the writ application did not deserve to be entertained. The Court observed that the release order clearly showed that after receipt of the notice in Form GST MOV-07, the person in charge of the conveyance voluntarily came forward and deposited the tax and penalty amount. Upon such payment, the competent authority accepted the amount and ordered release of the goods and conveyance.
The Court also noted that the petitioner was unable to demonstrate from the record that any protest had been raised at the relevant time while making the payment. It further observed that the order imposing penalty was an appealable order under Section 107 of the CGST/BGST Act, 2017, and that an appeal could have been filed within the statutory period of three months. However, the petitioner had chosen not to avail the statutory remedy of appeal.
The High Court held that filing a writ petition directly before the Court without availing the statutory appellate remedy should be discouraged, particularly when the petitioner was unable to establish any violation of principles of natural justice or any jurisdictional error.
Accordingly, the Court found no merit in the writ application and dismissed it.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard learned counsel for the petitioner and learned SC-11 for the State.
2. The petitioner in this writ application is seeking the following reliefs:-
“i) For issuing of a writ of certiorari or any other appropriate writ quashing/ setting aside the Summary of Show cause Notice for Penalty in the form of DRC-01 vide Reference No-ZD1010250120531 dated 13.10.2025 and Show Cause Notice in FORM GST MOV-07 vide Process No: Nil dated 13.10.2025 (as contained in Annexure-P1D and Annexure-P1E) which was issued by the Respondent No. -4 without affording any opportunity of hearing in violation of S 129(4) BGST/CGST Act, 2017 which render the entire proceedings of Respondent No- 4 violative of principles of natural justice and thus liable to be set aside.
ii) For issuing a writ of certiorari or any other appropriate writ quashing/ setting aside the Summary of Show cause Notice for Penalty in the form of DRC-01 vide Reference No-ZD101025012053I dated 13.10.2025 and Show Cause Notice in FORM GST MOV-07 vide Process No: Nil dated 13.10.2025 (as contained in Annexure-P1D and Annexure-PlE) issued by the Respondent No-4 were not lawful as goods detained by him was backed by valid tax paid invoice and E-way bill which had just expired during transportation due to some technical snag in the vehicle and there was no intention to evade tax by the petitioner and e way bill had just expired and this e way bill could not be extended in time as the vehicle was on the way to destination and not taking notice of the reply submitted by the petitioner to the show cause notice renders the entire proceedings of Respondent No-4 get invalid and thus liable to be set aside.
iii) For issuance of appropriate direction or any other appropriate writ to the Respondents to refund the penalty amount of Rs.2,00,090.00/-paid under CGST and BGST Act, 2017 along with interest which was deposited under duress as goods in transportation was urgently needed for business purpose and goods in transportation was covered by tax invoice and E Way Bill.
iv) For granting any other relief (s) to which the petitioner is otherwise found entitled to in accordance with law.”
3. It is the case of the petitioner that he was compelled to pay the penalty amount of Rs.2,00,090/- under the Central Goods and Services Tax/Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as the `CGST/BGST Act, 2017′) along with interest deposited under duress as the goods in transportation was urgently needed for business purpose. This Court has found that while making that payment, the petitioner had not raised any protest.
4. Learned SC-11 representing the State has drawn the attention of this Court towards Form GST MOV-05 dated 13.10.2025 (Annexure `P3A’) which is a release order. Annexure `P3A’ dated 13.10.2025 reads as under:-
“FORM GST MOV-05
OFFICE OF DEPUTY COMMISSIONER OF STATE TAX
JURISDICTION: JAMUI, STATE/UT: BIHAR
ADDRESS: -NA-
RELEASE ORDER
No.: ZD1010250120695
Date: 13/10/2025
Case ID: AD1010250022254
To,
RANJIT KUMAR
10BNCPK1349A1ZW
0, sikandra, sikandra, Jamui, Bihar, 811315
Ref: FORM GST MOV-02 No: ZD101025011993X dated: 13/10/2025
The goods conveyance bearing No. JH15AC7947 carrying goods was inspected by me SUNIL KUMAR, Deputy Commissioner of State Tax on 11/10/2025 and after inspection, an order of detention was issued in FORM GST MOV-06 on 13/10/2025 and a notice in FORM GST MOV-07 was served on the Person-in-Charge of the conveyance on 13/10/2025. The owner or Person-in-Charge of the conveyance has-
a. come forward and made the payment of tax and penalty as proposed and proceedings is drawn in this regard.
In view of the above, the goods and conveyance are hereby released on 13/10/2025 at 19:27 HRS in good condition.
Signature Name: SUNIL KUMAR
Designation: Deputy Commissioner of State Tax
Enclosure/s:
MOV-05
ACKNOWLEDGEMENT:
I hereby duly declare that I have received a copy of the above order.
Signature of the Owner/Person-in-Charge”
5. On the strength of the aforesaid release order (Annexure `133A’), learned SC-11 submits that by virtue of sub-section (5) of Section 129 of the CGST Act, 2017, on payment of the amount, all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded. In his submissions, in this case the proceeding stood concluded on 13.10.2025. Almost after four months from the date of the conclusion of the proceeding, the petitioner has filed this writ application. It is submitted that if at all the petitioner was aggrieved by the order imposing penalty, he could have preferred an appeal within the prescribed period of three months but having failed to do so, he has chosen to file this writ application. It is his submission that such writ applications are required to be discouraged.
6. Having regard to the entire facts and circumstances of the case, we are of the considered opinion that the writ application as framed in the facts of the present case need not be entertained. The order of release (Annexure `P3A’) is dated 13.10.2025. A reading of the same would show that on receipt of a notice in Form GST MoV-07, the Person-In-Charge of the conveyance on 13.10.2025 came forward and made payment of the tax and penalty as proposed. In view of the said readiness of the Person-In-Charge of the conveyance to deposit the tax and penalty amount, the competent authority accepted the same and directed for release of the goods and conveyance. Learned counsel for the petitioner is unable to demonstrate from the records that at the relevant point of time, the petitioner had made any protest. The order of the competent authority is an appealable order under Section 107 of the CGST/BGST Act, 2017. The appeal could have been preferred within a period of three months but the petitioner chose not to file any appeal within the prescribed period.
7. In such circumstance, this Court is of the considered opinion that filing of the writ application directly before this Court without availing the statutory remedy of appeal is required to be discouraged, more so where the petitioner is unable to demonstrate violation of principles of natural justice or any jurisdictional error.
8. In result, we find no merit in the writ application. It is dismissed accordingly.
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