Patna High Court
M/s P.T TradersversusThe Union of India
- Decided
- Disposal
- DISPOSED
Holding
The Court held that the demand order was validly passed after a hearing and therefore could not be quashed, directing the petitioner to seek remedy by filing a statutory appeal.
Summary
M/s P.T. Traders, a proprietorship firm, obtained a GST registration on 12‑01‑2023 but later alleged that its login credentials were misused by a friend, leading to the filing of fake invoices and the availing of large input tax credits. The Assessing Authority, after a site visit, found no business activity and issued a demand order under section 122 of the CGST Act for the FY 2021‑22 and 2022‑23, alleging irregular ITC of Rs.5,78,23,660. The petitioner filed a writ petition seeking quashing of the demand order, a show‑cause notice, and a stay on coercive action, contending violation of natural justice. The High Court observed that the demand order was passed after a personal hearing, thus no breach of natural justice, and held that the petitioner could pursue a statutory appeal before the Appellate Authority within one month. Consequently, the writ application was disposed without interference, directing the petitioner to file the appeal if desired.
Issues considered
- Whether the demand order issued under section 122 of the CGST Act can be quashed on the ground of violation of natural justice.
- Whether the writ court has jurisdiction to interfere with the demand order and show‑cause notice issued by the assessing authority.
- Whether the petitioner is entitled to a stay of coercive action pending the resolution of the demand.
Legislation cited
- Central Goods and Services Tax Act, 2017 — s. 122
- Central Goods and Services Tax Rules, 2017 — s. 100(2), 142(5)
Subjects
- GST
- Input Tax Credit
- Demand Notice
- Natural Justice
- Writ Jurisdiction
- Statutory Appeal
- Misuse of Credentials
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.1588 of 2026
======================================================
M/s P.T Traders a proprietary firm, Kunti Bhawan, Rajputana, Gardanibagh
No.1, Patna, Bihar- 800001, represented through its Proprietor Prasenjit
Thakur, S/o- Mahendra Thakur, R/o- Kalyaneshwari, Kulti, Kulti (m),
Barddhaman, P.S.- Kulti, West Bengal- 713369.
... ... Petitioner/s
Versus
1. The Union of India through the Finance Secretary, Department of Revenue,
Government of India, New Delhi.
2. The Government of India, Ministry of Finance (Department of Revenue),
through the Director, CBIC, New Delhi.
3. The State of Bihar, through Principal Secretary, State Tax, Bihar, Patna,
Income tax Building, Patna.
4. The Principal Commissioner, Central GST and CX, 3rd Floor, C.R (Annexe)
Building, Bir Chand Patel Marg, Patna-01.
5. The Assistant Commissioner, Central GST and Central Excise, Patna, West,
Patna- 800001.
6. The Superintendent, CGST and CX, Range Gandhi Maidan, Patna.
7. The Deputy/Assistant Commissioner (Review), CGST and CX (Hqrs) Patna-
01.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Ms. Roona, Advocate
For the State : Mr. Viksash Kumar, SC-11
Mr. Ravish Kumar, AC to SC11
For CGST : Mr. Sriram Krishna, Sr. SC, CGST
Mr. Prabhat Kumar Singh, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE JUSTICE SMT. SONI SHRIVASTAVA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
2 29-04-2026 Heard learned counsel for the petitioner, learned
Senior standing counsel for the CGST and learned counsel for the
State.
2. The petitioner in this case is seeking the following
relief(s):-
Patna High Court CWJC No.1588 of 2026(2) dt.29-04-2026
2/4
“(i) For issuance of appropriate
Writ/Writs/Order/direction for quashing the
demand order dated 30-07-2025 in Form-
GST DRC-07 read with rule 100(2) & 142(5)
issued by the respondent no.5, Assistant
Commissioner, C.G.S.T. & CX,Patna-01 &
summary of order dated 31/07/2025 bearing
reference no.ZD100725031595K whereby
and where under a demand is created under
section 122 of the CGST, Act for the F.Y.-
2021-2022 & 2022-23, alleging irregular
ITC availed to the tune of Rs.5,78,23,660/-
without considering the reply submitted by
the petitioner in routine & mechanical
manner.
(ii) For issuance of appropriate
Writ/Writs/Order/direction for quashing the
Demand cum-show cause notice dated 27-03-
2025 bearing notice no.ZD100425000331F
in Form-DRC-01 issued by the Assistant
Commissioner(A.E)CGST & CX,Patna-01
after about more than two years of
cancellation of the GST registration and
filing of Form-GST-10 i.e. final return.
(iii) For issuance of appropriate Writ
/Writs/Order/ direction to stay the further
operation or proceeding in light of the order
dated 30-07-2025 & restrain the respondents
from taking any coercive action against the
petitioner during the pendency of this case.
(iv) For any other appropriate writ (s) or
order(s) or direction which may be deemed
fit and proper in the facts and circumstances
of the case.”
3. We have perused the impugned order dated
30.07.2025, it has been passed only after giving opportunity of
personal hearing to the petitioner, therefore, we do not find it a
case of violation of principles of natural justice while passing the
impugned order.
Patna High Court CWJC No.1588 of 2026(2) dt.29-04-2026
3/4
4. The facts stated in the writ application clearly
demonstrate that admittedly this petitioner had got registration
certificate from the GST REG-06 bearing Registration No.
10ATZPT9281G1ZY in his name and trade name being M/s P T
Traders, a proprietorship firm effective from 12.01.2023. He had
not filed the return from the month of January, 2023 Online,
however, it was filed on 03.02.2023 as nil return. The petitioner
shared his Login ID, password and GST Credentials on Whatsapp
under good faith with his friend Suraj Kumar Rishi for purpose of
closing/surrendering the GST Registration but the petitioner
admits that the same has been misused.
5. On perusal of the findings recorded by the Assessing
Authority, we find that when the Authorities visited the place of
business of the petitioner, no activity was found there. There is a
finding that fake invoices were used on the strength of the
Credentials of the petitioner, huge amount of in-put tax credit has
been availed. On the face of such finding recorded by the
Assessing Authority, this Court thinks not just and proper to go
into the merit of the case and take a view sitting in its writ
jurisdiction.
6. Learned counsel for the petitioner submits that the
petitioner has filed a complaint with the local police alleging
misuse of his Credentials by his friend and has also filed a writ
Patna High Court CWJC No.1588 of 2026(2) dt.29-04-2026
4/4
application in this Court seeking proper investigation in the matter.
7. This Court is not concerned with the same as it is
always open to the petitioner to seek his remedy before
appropriate Court/Forum in accordance with law.
8. So far as the impugned order in this case, it is also an
appealable order, therefore, this Court grants liberty to the
petitioner to seek his remedy, if so advised, by filing a statutory
appeal before the Appellate Authority within a period of one
month from today.
9. If any such appeal is preferred within the stipulated
period, the Appellate Authority shall consider the same keeping in
view that under some legal advice, the petitioner had approached
this Court by filing writ application which remained pending in
this Court. The Appellate Authority shall give appropriate
opportunity of hearing and pass an appropriate order.
10. This writ application stands disposed of accordingly.
(Rajeev Ranjan Prasad, J)
(Soni Shrivastava, J)
Harsh/-
U
Checking your session…
Lawyer court records for this case
Associated through the court’s case reference.