Patna High Court
M/s King BricksversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The ex‑parte demand order dated 29‑04‑2024 is quashed and the respondents are directed to conduct fresh assessment with an opportunity of hearing within six months.
Summary
M/s King Bricks filed a writ petition challenging an ex‑parte demand order and a show‑cause notice issued by the Bihar Commercial Tax authorities for the GST period April 2018‑March 2019. The petitioner alleged that the notices were not properly communicated, no hearing was afforded, and the assessment was made without a proper technical evaluation of coal consumption versus brick production, violating the principles of natural justice and Section 75(4) of the CGST/BGST Act. The High Court referred to the earlier judgment in Rounak Int Udyog v. State of Bihar, which held that the assessing authority must conduct a detailed technical examination and provide a hearing. Relying on that precedent, the Court quashed the demand order dated 29‑04‑2024 and directed the respondents to redo the assessment in compliance with the Bihar GST Act, giving the petitioner a reasonable opportunity of hearing within six months. The petition was allowed.
Issues considered
- Whether an ex‑parte demand order under Section 73 of the CGST/BGST Act can be issued without prior notice and hearing.
- Whether the method of uploading a show‑cause notice on the GST portal satisfies the statutory requirement of communication under Section 75(4).
- Whether the assessing authority must undertake a technical verification of inputs (coal) against output (bricks) before levying tax, interest and penalty.
- Whether the High Court has jurisdiction to quash the demand order and direct fresh proceedings.
Legislation cited
- Central Goods and Services Tax Act, 2017 — s. 73(9), 75(4)
Subjects
- GST
- natural justice
- ex‑parte demand
- show cause notice
- quashing order
- tax assessment
- high court
- writ petition
- CGST Act
- Bihar GST Act
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.8948 of 2025
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M/s King Bricks a proprietorship firm having its place of business at
Karanpur, Fatehpur, Block- Barsoi, P.O- Fatehpur, P.S- Kachna, District-
Katihar, Bihar- 854317 through its proprietor namely Raja Pradhwani, male,
aged about 43 Years, Son of Sri Ghanashyam Das Pradhwani, residing at
Jagadish Chandra Sarani, Raiganj, Uttar Dinajpur, Village- Kumardangi, P.O
and P.S- Raiganj, District- Uttar Dinajpur, West Bengal- 733134.
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary cum Commissioner,
Commercial Tax Department, Government of Bihar.
2. The Assistant Commissioner of State Tax, Katihar Circle, Purnea Division,
Katihar, Bihar.
3. The Deputy Commissioner of State Tax, Katihar Circle, Purnea Division,
Katihar, Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Anubhav Khowala, Advocate
For the Respondent/s : Mr.Government Pleader 07
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
and
HONOURABLE MR. JUSTICE ARUN KUMAR JHA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)
2 13-03-2026 The present writ petition has been filed seeksing the
following reliefs:-
“(i) For issuance of a writ in the nature of
certiorari or any other appropriate writ, order or
direction for quashing of the ex-parte Demand Order
bearing Reference No. ZD100424037900X dated
29.04.2024 along with a summary order in form GST
DRC-07 dated 29.04.2024 (Annexure P/1 series) issued
by the respondent no. 3 on GST Portal, whereby a total
demand of tax along with interest and penalty amounting
to Rs 26,66,667.40 has been created against the
petitioner under sub-section 9 of section 73 of the Central
Patna High Court CWJC No.8948 of 2025(2) dt.13-03-2026
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Goods and Services Tax Act, 2017 or the Bihar Goods
and Services Tax Act, 2017 for the tax period April 2018 -
March 2019, without the authority of GST Law and
without adhering to the principles of natural justice to the
principles of natural justice as the show cause notices
and intimation to show cause notice in relation to the
above demand order were not effectively communicated
to the petitioner and no opportunity of personal hearing
was afforded before passing the above impugned order.
(ii) For issuance of a writ in the nature of
certiorari or any other appropriate writ, order or
direction for quashing of the Show Cause Notice bearing
reference no. ZD1012230155915 dated 13.12.2023 along
with a summary order in form GST DRC-01 dated
13.12.2023 (Annexure P/2 series) issued by the
respondent no. 2, whereby a total demand of tax along
with interest and penalty amounting to Rs 25,86,667.96
has been determined against the petitioner under sub-
section 1 of section 73 of the CGST/BGST Act, 2017 for
the tax period April 2018-March 2019, without adhering
to the principles of effective natural justice as there was
no communication of the impugned notice as it was
merely uploaded in the "additional notices and orders"
tab of the GST portal instead of the "notices and orders"
tab and there was neither any opportunity of any
personal hearing granted to the petitioner in the
Impugned SCN nor it was provided before passing the
adverse demand order which is violative of the provisions
of section 75(4) of the CGST/BGST Act, 2017.
(iii) For further issuance of a writ or order or
direction upon the respondents to drop the impugned
proceedings against the petitioner for tax period April
2018-March 2019 and in case any clarifications is
required by the respondents in relation to the allegations
imposed upon the petitioner through the above impugned
Show Cause Notice dated 13.12.2023 as confirmed by the
above impugned Demand Order dated 29.04.2024, the
respondents may further be directed to initiate a fresh
proceedings by issuing a Show cause Notice (subject to
Patna High Court CWJC No.8948 of 2025(2) dt.13-03-2026
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the limitation for issuance of such notices as envisaged
under the CGST/ BGST Act, 2017) and after providing
reasonable time to file a reply to the notice and an
effective opportunity of personal hearing to the petitioner
to represent their case, may complete the adjudication in
accordance with the scheme of the CGST/BGST Act,
2017;
(iv) For further issuance of a writ or order or
direction restraining the Respondents and any other
authority executing any of the directions issued by the
said respondents, from taking any coercive action for
recovery of the amount of tax, interest and penalty
demanded in terms of the impugned order and granting
stay of execution and operation of impugned order dated
29.04.2024 passed by the respondent no 3 during the
pendency of this writ application.”
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
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
Patna High Court CWJC No.8948 of 2025(2) dt.13-03-2026
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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 ex-parte Demand Order bearing Reference
No. ZD100424037900X dated 29.04.2024 along with the
summary order in form GST DRC-07 dated 29.04.2024
(Annexure P/1 series) issued by the Deputy Commissioner of State
Tax, Katihar Circle, Katihar are 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
receipt/production of a copy of this order.
5. It is needless to state that in case the petitioner
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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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