Shiv Ganga Trading Co. Vs State of Bihar (Patna High Court)
Patna High Court, in the case of Shiv Ganga Trading Co. vs. State of Bihar, quashed the GST order issued against the petitioner. The petitioner challenged the order dated April 27, 2024, and the corresponding summary of the order in GST DRC-07, arguing that the imposed tax, interest, and penalty were unlawful. The petitioner contended that the items in question—pulses and food grains under HSN Code 071390—were fully exempt from GST under the Central and Bihar GST Acts. The petitioner further asserted that they were not provided sufficient details in the notice issued on July 21, 2023, preventing them from filing an effective response. Moreover, it was pointed out that for the previous financial year (2017-18), exemption had been granted, and there was no significant change in trade during 2018-19 to justify the tax imposition. The respondents argued that all legal procedures were followed, including the publication of notices on the GST common portal with multiple reminders. They also stated that the petitioner had a statutory remedy of appeal under Section 107 of the CGST Act, which had not been exhausted.
After hearing both parties, the court ruled in favor of the petitioner, stating that the initial notice lacked adequate material information, making it difficult for the petitioner to respond effectively. The court acknowledged the petitioner’s failure to check the common portal for further notices but emphasized that the fundamental issue lay in the inadequacy of the initial notice. Consequently, the court set aside the GST demand order and directed the authorities to reassess the matter within eight weeks, ensuring due process. The petitioner was also instructed to cooperate by furnishing all necessary documents. If the petitioner failed to comply, the authorities were granted the liberty to issue an ex-parte order. With this ruling, the court reinforced the necessity for clear and detailed communication in tax proceedings to uphold procedural fairness.
