Great Eastern Hire Purchase Private Limited Vs State of Bihar (Patna High Court)
Summary: The Patna High Court, after passing a reasoned judgment dated 06.05.2025 setting aside Annexures ‘P4’ and ‘P5’, considered the remaining issue of interest and cost payable to Great Eastern Hire Purchase Private Limited. Notices had earlier been issued to Respondent No. 5, the Assistant Commissioner of State Tax, Gandhi Maidan Circle, Patna, and Respondent No. 6, the Additional Commissioner of State Tax (Appeals), Patna West Division, Patna, regarding their conduct in relation to the Court’s judgment in SIS Cash Services Private Limited vs. Union of India in CWJC No. 6514 of 2021 dated 24.01.2024. Respondent No. 5 stated that the order dated 24.08.2023 was passed after verification from the GST—BO Portal and Back office and that the order dated 12.09.2019 had been passed under Section 73 of the Central/Bihar Goods and Services Act, 2017. Respondent No. 5 also stated that the judgment in SIS Cash Services had not been brought to her notice, while Respondent No. 6 stated in his show cause that the law laid down in SIS Cash Services was never brought to his knowledge. Respondent No. 6 also explained that the petitioner had filed a statutory appeal on 30.01.2024 against the order dated 12.09.2019 and had sought admission under Notification No. 53 of 2023 CGST dated 02.11.2023, but the appeal was rejected on the ground that the notification covered orders under Sections 73 and 74 and not Section 62. Both respondents tendered unconditional apology and disclosed reasons for their actions. As no rejoinder was filed by the petitioner, the statements in the show causes remained uncontroverted, and the Court accepted the reasons shown by Respondent Nos. 5 and 6 and held that the contempt notice was not required to be proceeded with. On the issue of interest, the learned Advocate General, on instruction, offered simple interest at 9% per annum from the date of recovery of the amount till the date of refund, which was accepted by the petitioner. The Court accordingly directed the State respondents to pay simple interest at 9% per annum from the date of recovery till the date of refund within six weeks. Since the Court had noticed that the recovery was made illegally and had resulted in litigation, it further directed payment of costs of Rs.10,000/- to the petitioner within the same period. The Court also observed that it was open to the State Government to recover the interest and cost from the erring officials, if so desired, and disposed of the writ application accordingly.
Cases Discussed
- SIS Cash Services Private Limited vs. Union of India in CWJC No. 6514 of 2021 dated 24.01.2024
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard Mr. Bijay Kumar Gupta, learned counsel assisted by Mr. Alok Swaroop, learned counsel for the petitioner and Mr. P.K. Shashi, learned Advocate General assisted by Mr. Vivek Prasad, learned GP-7 for the State Respondents. Respondent no. 5 has entered appearance through Mr. Sanjeev Kumar Mishra, learned Senior Counsel assisted by Ms. Manini Jaiswal, learned Advocate.
2. This Court has considered the writ application and has passed a reasoned judgment dated 06.05.2025 as regards the legality and validity of Annexure ‘P4’ and ‘P5’ of the writ application. The operative part of the judgment dated 06.05.2025 as contained in paragraph ‘35’ to ‘37’ read as under:-
“35. While setting aside the impugned orders as contained in Annexures ‘P4’ and ‘P5’ of the writ application, the consequences shall follow. We issue notice to the Assistant Commissioner of State Tax, Gandhi Maidan Circle, Patna (Respondent No. 5) who passed the impugned order (Annexure ‘P4’) to show cause as to why this Court should not award interest and cost which would be recovered from her.
36. We also call upon the Appellate Authority, namely, the Additional 15-18049 Commissioner of State Tax (Appeals), Patna West Division, Patna (Respondent No. 6) to satisfy this Court as to why a proceeding for contempt be not initiated against him for acting in willful disobedience and disregard to the order of this Court passed in the case of SIS Cash Services (supra).
37. Let both the authorities, namely, Respondent No. 5 and Respondent No. 6 file their response within two weeks from today.”
3. After the aforesaid judgment/order passed by this Court, the consideration remained only with respect to the award of interest and cost which may be allowed to the petitioner.
4. Pursuant to the notices issued to respondent no. 5 and respondent no. 6 calling upon them to show cause as to why appropriate proceeding be not initiated against them for their willful disobedience and disregard shown to the order of this Court passed in the case of SIS Cash Services Private Limited vs. Union of India in CWJC No. 6514 of 2021 dated 24.01.2024.
5. Respondent no. 5 and respondent no. 6 have filed their respective show cause. Respondent no. 5 has taken a plea that the order dated 24.08.2023 was passed by her after verifying from the GST—BO Portal, Back office and the order dated 12.09.2019 has been passed in terms of Section 73 of the Central/Bihar Goods and Services Act, 2017. Relevant extract of the portal demand and collection register has been annexed as Annexure ‘R5/5’ to the show cause.
6. It is submitted by learned Senior Counsel for the respondent no. 5 that in fact the judgment of this Court in the case of SIS Cash Services (supra) was not brought to the notice of Respondent no. 5. This Court, however, finds that what is being sought to be submitted orally has not been stated on affidavit in the show cause filed on behalf of respondent no. 5.
7. The show cause filed on behalf of respondent no. 6, however, contains an avernment in paragraph ‘12’ of the show cause that the law laid down by the Hon’ble Court in SIS Cash Services (supra) was never brought to the knowledge of the said respondent by the petitioner or by any other person. It is submitted that respondent no. 6 being Appellate Authority had no knowledge of any such law having been laid down by the Hon’ble Court. It is his submission that the petitioner had preferred statutory appeal on 30.01.2024 challenging the order dated 12.09.2019 whereby the impugned demand had been created. The petitioner prayed that the appeal be admitted in terms of the appeal amnesty scheme brought about by Notification No. 53 of 2023 CGST dated 02.11.2023. Respondent no. 6 rejected the appeal because the Notification No. 53 of 2023 covers only the order passed under Sections 73 and 74 and not those passed under Section 62.
8. Learned senior counsel for respondent no. 5 and respondent no. 6 submits that both the respondents have sought unconditional apology and at the same time, they have disclosed the reason for passing of the impugned orders.
9. No rejoinder to the show cause filed on behalf of respondent no. 5 and respondent no. 6 has been filed by the petitioner, therefore, the statements made therein remained uncontroverted. In the circumstances, this Court accepts the reasons shown by respondent nos. 5 and 6. The notice for initiation of contempt is not required to be proceeded with.
10. Now, the issue remained with respect to interest and cost to the petitioner. The matter was heard and learned Advocate General sought time to seek instruction.
11. Today, when the matter has been called out, learned Advocate General submits on instruction that the State respondents shall pay simple interest at the rate of 9% per annum from the date of recovery of the amount till the date of refund.
12. Mr. Bijay Kumar Gupta, learned counsel for the petitioner accepts the offer made by learned Advocate General.
13. Accordingly, this Court directs the State respondents to pay simple interest at the rate of 9% per annum from the date of recovery of the amount till the date of refund to the petitioner. The said payment shall be made within a period of six weeks from today.
14. In the facts and circumstances of the case, since we have noticed that the recovery was made illegally and that has resulted in litigation, we direct the respondents to pay cost of Rs.10,000/- (Rupees Ten Thousand Only) to the petitioner within the same period.
15. It is always open to the State Government to recover the interest and cost from the erring officials, if so desire.
16. This writ application stands disposed of accordingly.
