Patna High Court
M/s. Pawan Int. Udyog,versusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The assessment order dated 25‑04‑2024 is quashed and the respondents are directed to undertake a fresh assessment in compliance with the Bihar GST Act, providing the petitioner an adequate hearing.
Summary
M/s Pawan International Udyog challenged a GST demand of Rs. 92,51,744 raised by the Joint Commissioner, State Tax, Bihar Sharif, on the ground that the Show Cause Notice (Form DRC‑01) was procedurally improper for a registered entity, as clarified in Radha Krishan Industries v. State of Himachal Pradesh. The petitioner sought quashing of the assessment order dated 25‑04‑2024, a stay of its operation, and a fresh, fair assessment complying with the Bihar GST Act and principles of natural justice. The Court, relying on the recent judgment in Rounak Int Udyog v. State of Bihar, observed that the assessing authority had failed to correlate coal consumption with brick production and had not afforded a proper hearing. Consequently, the Court quashed the impugned order, directed the respondents to conduct a fresh assessment within six months, and mandated adherence to statutory safeguards and opportunity of hearing. The petition was allowed, with a warning that non‑cooperation could lead to ex parte proceedings.
Issues considered
- Whether a Show Cause Notice issued under Form DRC‑01 is valid for a registered taxpayer under the GST law.
- Whether the assessment order dated 25‑04‑2024 violates procedural safeguards and the principles of natural justice.
- Whether the impugned assessment order should be set aside and a fresh assessment ordered.
- Whether the assessing authority must conduct the reassessment in accordance with the Bihar Goods and Services Tax Act, 2017.
Subjects
- GST assessment
- Show Cause Notice
- natural justice
- procedural fairness
- quashing order
- Bihar tax law
- fresh assessment
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.7565 of 2025
======================================================
M/s. Pawan Int. Udyog, through its Proprietor Krishnadeo Prasad Yadav,
Male, aged about 59 years, Son of Hari Yadav, Resident of Temple Kandopur,
Adampur, Nalanda, Bihar 803109.
... ... Petitioner/s
Versus
1. The State of Bihar through the Commissioner of State Taxes, Bihar, Office
of the Commissioner of State Taxes, 2nd Floor, Vikas Bhawan, Bailey Road,
Patna, Bihar.
2. The Joint Commissioner, State Taxes, Bihar Sharif, Office of the Joint
Commissioner, Circle Bihar Sharif, Commercial Taxes Building, Near Old
Bus Stand, Bihar Sharif, Nalanda, Bihar.
3. The Deputy Commissioner, State Taxes, Bihar Sharif, Office of the Deputy
Commissioner, Circle Bihar Sharif, Commercial Taxes Building, Near Old
Bus Stand, Bihar Sharif, Nalanda, Bihar.
4. The Assistant Commissioner, State Taxes, Bihar Sharif, Office of the
Assistant Commissioner, Circle Bihar Sharif, Commercial Taxes Building,
Near Old Bus Stand, Bihar Sharif, Nalanda, Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Harsh Kaushal, Advocate
Mr. Yashraj Bardhan, Advocate
Ms. Annapurna Sinha, Advocate
Mr. Amit Kumar, Advocate
For the Respondent/s : Ms. Roona, AC to GP-7
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
and
HONOURABLE MR. JUSTICE ARUN KUMAR JHA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)
3 08-04-2026 The present writ petition has been filed seeking the
following reliefs:-
“(i) For quashing and setting aside the impugned order
dated 25.04.2024, whereby a cumulative demand of
92,51,744/- was raised under Form DRC-07. The
impugned order is based on a procedurally improper
Show Cause Notice (SCN), issued under Form DRC-01,
which is intended solely for unregistered entities, as
Patna High Court CWJC No.7565 of 2025(3) dt.08-04-2026
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clarified in Radha Krishan Industries v. State of
Himachal Pradesh (2021), and is thus unsustainable in
law.
(ii) For directing the Respondents to ensure strict
adherence to statutory and procedural safeguards under
the GST Act, as well as compliance of principles of
Natural justice in any future proceedings against the
Petitioner, including issuing appropriate Show Cause
Notices, sharing material evidence relied upon, and
providing adequate opportunity for representation to
prevent arbitrary actions.
(iii) For directing the Respondents to review the
assessment proceedings and conduct a fresh and fair
assessment, if required, in compliance with the GST Act
and in adherence to principles of natural justice. The
Respondents must consider material evidence, review the
detailed submissions made by the Petitioner, and ensure
transparency and fairness in the process.
(iv) For granting of interim relief by staying the
effect and operation of the impugned order dated
25.04.2024 and direct the Respondents to refrain from
initiating any further coercive actions against the
Petitioner.”
2. At the outset, the learned counsel for the parties
have relied upon a judgment dated 30.08.2025, passed in the
case of Rounak Int Udyog vs. the State of Bihar (CWJC
No.7580 of 2025), the operative portion whereof is reproduced
hereinbelow:-
“2. Perusal of the records, it is evident that
Respondents before levying tax, interest, penalty insofar
as consumption of coal to produce bricks, no yardstick
has been taken note of to the extent what would be the
quantum of coal read with the production of bricks so as
to draw inference that petitioner had manipulated while
Patna High Court CWJC No.7565 of 2025(3) dt.08-04-2026
3/4
generating Invoice read with e-Way bill. For example for
production of one ton of bricks, the quantity of coal
required typically ranges from 100 to 250 kilograms,
proportionately production of bricks and purchase of coal
are to be read with relevant papers. This exercise has not
been under taken by the Respondents. In the light of these
facts and circumstances, the petitioner has made out a
case so as to interfere with the impugned decision of the
Respondent. Accordingly, it is set aside.
3. Respondents are hereby directed to take out
fresh necessary steps strictly in accordance with the
technical issue and also providing ample opportunity of
hearing to the petitioner. The above exercise shall be
completed within a period of six months from the date of
receipt of this order. Petitioner shall cooperate with the
concerned official Respondents.”
3. The learned counsel for the respondent-State
submits that in view of the aforesaid judgment passed in the
case of Rounka Int Udyog (supra), he has got no objection in
case the matter is remanded back to the appropriate authority.
4. Having regards to the facts and circumstances of
the case, the impugned order dated 25.04.2024 passed by the Joint
Commissioner, State Tax, Bihar Sharif Circle in Case No.13 of
2024-25 is quashed. The respondents are hereby directed to
undertake fresh steps strictly in accordance with the provisions
contained under the Bihar Goods and Services Tax Act, 2017 and
after providing an adequate opportunity of hearing to the
petitioner, the final order shall be passed. Such exercise shall be
completed within a period of six months from the date of
Patna High Court CWJC No.7565 of 2025(3) dt.08-04-2026
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receipt/production of a copy of this order.
5. It is needless to state that in case the petitioner
does not co-operate with the concerned officials, the
respondents shall be free to proceed ex parte.
6. The writ petition stands allowed.
(Mohit Kumar Shah, J)
( Arun Kumar Jha, J)
kanchan/-
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