Maa Shila Traders Vs State of Bihar (Patna High Court)
Summary: The Patna High Court disposed of Maa Shila Traders’ writ petition challenging an order dated 08.05.2026 imposing penalty and interest, granting liberty to pursue the statutory appeal. The petitioner had paid the assessed tax without demur but disputed liability for interest and penalty, submitting that it regularly filed returns and conducted business in accordance with the CGST/BGST Act and Rules. The State submitted that verification revealed dealings with a non-existing supplier, M/s J.K. Enterprises, and objected to the petitioner approaching the Court without availing the alternative remedy under Section 107 of the GST Act. Upon examining the record, the Court observed that the writ application challenging the adjudication order had been filed within the statutory time provided under Section 107. It permitted the petitioner to file an appeal before the Appellate Authority within one month and directed that, if filed within that period, the appeal be decided on its own merits in accordance with law without going into the question of limitation, if any. The Court did not determine the substantive liability for penalty or interest.
FULL TEXT OF THE ORDER OF PATNA HIGH COURT
Heard both the parties.
2. The petitioner has filed the present writ application challenging the order dated 08.05.2026, whereby the penalty and interest has been imposed on the petitioner. The petitioner has paid the tax amount without any demur assessed by the Proper Authority.
3. Learned counsel for the petitioner submits that liability to pay interest and penalty was not there on the petitioner inasmuch as the petitioner filed return regularly and conducted its business in accordance with the provisions of the CGST/BGST Act and Rules.
4. On the other hand, learned counsel for the State submits that upon verification it was found that the petitioner was dealing with non-existing entity namely M/s J.K. Enterprises and found it (supplier) non-existing. The petitioner in the circumstances has paid the tax but challenging the liability of penalty and interest.
5. Learned counsel next submits that as per Section 107 of the GST Act, there is an alternative remedy of appeal and the petitioner without availing the alternative remedy has directly filed the writ application before this Court.
6. We have heard learned counsel for the parties and have gone through the material on records, it appears that the order dated 08.05.2026 passed by the Adjudicatory Authority has been challenged before this Court by filing the present writ application within the statutory time provided under Section 107.
7. In the circumstances, the present writ application is disposed with liberty to the petitioner to file appeal before the Appellate Authority within a period of one month.
8. If such, an appeal is filed by the petitioner within the aforesaid period, the respondent/appellate authority shall decide the appeal on its own merit in accordance with law without going into the question of limitation, if any.
9. With the aforesaid observation and direction the writ application is disposed.
