Patna High Court
Kumar Mritunjay Construction Private Limited,versusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The assessment and demand orders dated 22‑23 July 2024 are quashed and the matter remanded for issuance of a fresh show‑cause notice and hearing.
Summary
Kumar Mritunjay Construction Private Ltd., whose GST registration was cancelled on 11 September 2020, challenged assessment and demand orders dated 22‑23 July 2024 issued by the Deputy Commissioner of State Tax for the period April‑June 2023. The petitioner claimed the orders violated natural justice and the statutory notice requirement under Section 75(4) of the Bihar Goods and Services Tax Act, 2017. The State argued that under Section 29(3) the cancellation does not extinguish liability for periods prior to cancellation and that Section 63 permits assessment within five years of the return filing deadline. The Court held that the orders were passed without a proper show‑cause notice and hearing, thereby breaching the statutory provisions, and quashed the assessment and demand orders. The matter was remanded to the assessing officer to issue a fresh show‑cause notice, allow a hearing, and pass a new assessment within the stipulated time.
Issues considered
- Whether the assessment and demand orders dated 22‑23 July 2024 violate the principles of natural justice and the statutory notice requirement under Section 75(4) of the BGST Act, 2017.
- Whether the State can levy tax, interest and penalty for a period after the petitioner’s GST registration was cancelled.
- Whether the orders should be quashed and the matter remanded for a fresh show‑cause notice and hearing.
Subjects
- GST
- assessment order
- cancellation of registration
- natural justice
- statutory notice
- show cause notice
- quashing of order
- tax liability
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.8239 of 2025
======================================================
Kumar Mritunjay Construction Private Limited, a private limited company,
registered under companies act, 1956 having its office at Near State Bank of
India, C/o Muneshwar Prasad Singh, Nai Sarai, Biharsharif, Nalanda, Bihar,
PIN-803101 through its Director, Kumar Mritunjay (Male) (aged about 57
years) son of Late Tejnarayan Singh, resident of Near State Bank of India, Nai
Sarai, Biharsharif, Nalanda, Bihar, PIN-803101.
... ... Petitioner/s
Versus
1. The State of Bihar through the Commissioner of State Tax, having its office
at Vikas Bhawan Bailey Road, Patna.
2. Deputy Commissioner of State Tax, Biharsharif, Patna East, Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Sadashiv Tiwari, Adv.
For the State : Mr. Kumar Vivek, GA-7
For the CGST : Ms. Shilpi Keshri, Adv.
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
and
HONOURABLE MR. JUSTICE ARUN KUMAR JHA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)
3 15-04-2026 The learned counsel for the Respondent-State seeks to file
a supplementary counter affidavit, copy whereof has already
been filed online. Let the same be kept on record.
2. The present writ petition has been filed seeking the
following reliefs:-
“1(i). For issuance of a writ or order or a direction in the
nature of certiorari for quashing of the order dated
23.07.2024 and the summary of order issued in form GST
DRC 07 dated 23.07.2024 (as contained in Annexure-
P4), passed and issued by the Respondent No. 2 under
section 73 of the Bihar goods and services Tax Act, 2017
(hereinafter called the Act) and also the order, passed by
Patna High Court CWJC No.8239 of 2025(3) dt.15-04-2026
2/4
the respondent against the principles of natural justice
and statutory notice as mandated in section 75(4) of the
Act.
(ii). For further issuance of a writ or order or a direction
restraining the respondents from taking any coercive
action against the petitioner in terms of section 79 of the
BGST Act, 2017 for recovery of the amount of tax,
interest & penalty determined in terms of the impugned
order dated 23.07.2024 and the summary of order issued
in form GST DRC-07 dated 23.07.2024.”
3. Though a counter affidavit has been filed in the present
case, however it has been brought to our notice by the petitioner
by filing a supplementary affidavit that the assessment order
pertains to a period post cancellation of registration of the
company of the petitioner, inasmuch as the registration was
cancelled on 11.9.2020.
4. The learned counsel for the Respondents submits that
though it is true that as per Section 29(3) of the Bihar/ Central
Goods and Services Act, 2017 (hereinafter referred to as “the
Act, 2017”), the cancellation of registration shall not effect the
liability of the person to pay tax and other dues under the Act,
2017 or to discharge any obligation under the Act, 2017 or the
Rules made thereunder for any period prior to the date of
cancellation, however Section 63 of the Act, 2017 empowers
proper officer to proceed to assess the tax liability of such
taxable person for the relevant tax period, whose registration has
Patna High Court CWJC No.8239 of 2025(3) dt.15-04-2026
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been cancelled or who has failed to obtain registration, but has
still continued to carry on business even after cancellation of
registration, by issuing an assessment order within a period of
five years from the date specified under Section 44 for
furnishing of the annual return for the financial year to which
the tax not paid relates.
5. Thus, it is submitted by the learned counsel for the
Respondent-State that the impugned assessment order dated
22.7.2024, passed under the pen and signature of the Deputy
Commissioner of State Tax, Biharsharif Circle, Biharsharif and
the demand order dated 23.7.2024, issued under the pen and
signature of the Deputy Commissioner of State Tax, Biharsharif,
Patna East, Bihar be quashed and the matter be remanded to the
assessing authority for enabling him to issue fresh show cause
inviting objections from the petitioner and after giving him an
opportunity of hearing, he shall pass fresh assessment order.
6. Having regard to the facts and circumstances of the case
and considering the submissions made by the learned counsel
for the Respondents, the assessment order dated 22.7.2024,
passed by the Deputy Commissioner of State Tax, Biharsharif
Circle, Biharsharif and the demand order dated 23.7.2024,
passed by the Deputy Commissioner of State Tax, Biharsharif,
Patna High Court CWJC No.8239 of 2025(3) dt.15-04-2026
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Patna East, Bihar are quashed and the matter is remanded back
to the concerned assessing officer, who shall within a period of
four weeks from today issue fresh show cause to the petitioner
for the tax period April, 2023-June, 2023, inviting objections
and after granting an opportunity of hearing to the petitioner,
appropriate assessment order shall be passed within a period of
eight weeks, thereafter.
7. The writ petition stands allowed to the aforesaid extent.
(Mohit Kumar Shah, J)
( Arun Kumar Jha, J)
Ajay/-
U
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