Simplified Explanation of the Judgment
This judgment delivered by the Patna High Court in 2023 deals with a common problem faced by many taxpayers under the Goods and Services Tax (GST) regime—ex parte assessment orders passed due to non-filing of returns and the limited remedies available thereafter.
In the present case, the petitioner was a sole proprietorship firm engaged in business in Bihar. Due to certain reasons, the firm failed to file its GST return within the prescribed time. Because of this default, the GST authorities proceeded to pass an assessment order under Section 62 of the Bihar Goods and Services Tax Act, 2017, which allows the department to make a “best judgment assessment” when returns are not filed.
The assessment order was passed on 18 December 2019. As per law, the petitioner had the right to file an appeal against this order. Accordingly, an appeal was filed. However, the appellate authority dismissed the appeal on 12 December 2020, not on merits, but solely on a technical ground—non-filing of a certified copy of the assessment order.
After losing the appeal on this technical issue, the petitioner approached the Patna High Court by filing a writ petition under Article 226 of the Constitution of India, directly challenging the original assessment order passed under Section 62 of the BGST Act.
The core expectation of the petitioner was that the High Court would examine the legality and correctness of the assessment order and grant relief by setting it aside.
However, the High Court made it very clear that a writ petition cannot ordinarily be used to challenge an assessment order, especially when the statute itself provides a complete appellate mechanism. The Court observed that bypassing statutory remedies and directly invoking writ jurisdiction is not legally permissible in such cases.
At this stage, the matter could have ended against the petitioner. But the Court took judicial notice of an important policy development under GST law.
The Court referred to Notification No. 06/2023 dated 31 March 2023, issued by the Central Government on the recommendations of the GST Council. This notification provided a special one-time opportunity to registered persons whose assessments under Section 62 were completed on or before 28 February 2023 due to non-filing of returns.
Under this notification:
- If the registered person files the pending return within the specified time,
- And pays the applicable tax along with interest and late fee,
- Then the earlier ex parte assessment order shall be deemed to have been withdrawn,
- And the assessment would have to be redone in accordance with law.
Recognizing the benefit of this notification, the High Court refrained from examining the assessment order on merits. Instead, it disposed of the writ petition by granting liberty to the petitioner to avail the benefit of the notification and file the return as permitted.
Thus, the Court struck a balance—while maintaining discipline regarding writ jurisdiction, it ensured that the petitioner was not deprived of relief available under the latest GST policy.
Significance or Implication of the Judgment
This judgment is significant for taxpayers, professionals, and tax administrators for several reasons:
- It reinforces that writ jurisdiction is not a substitute for statutory appeals in tax matters.
- It highlights the importance of government amnesty and remedial notifications under GST.
- It protects genuine taxpayers from harsh consequences of ex parte assessments when a corrective window is provided by law.
- It sends a clear message that courts will support legislative and executive intent to reduce GST litigation.
For the general public and small businesses, the judgment reassures that procedural lapses may still be cured if the law provides an opportunity, but such relief must be availed in the manner prescribed.
Legal Issue(s) Decided and the Court’s Decision
- Whether an assessment order under Section 62 of the BGST Act can be challenged directly under Article 226
- Decision: No. The Court held that a writ petition is not maintainable when statutory remedies exist.
- Whether the petitioner should be denied relief despite a beneficial GST notification
- Decision: No. The Court allowed the petitioner to avail the benefit of Notification No. 06/2023.
- What is the effect of filing return under the said notification
- Decision: The earlier assessment order would stand withdrawn and fresh assessment would follow.
Case Title
M/s Chandan Kumar Singh Vs. The Union of India,
Case Number
Civil Writ Jurisdiction Case No. 4791 of 2023
Coram and Names of Judges
- Hon’ble the Chief Justice
- Hon’ble Mr. Justice Madhuresh Prasad
Names of Advocates and Who They Appeared For
- Advocate for the Petitioner: Counsel for the petitioner
- Advocate for the Union of India: Learned ASG and Senior Standing Counsel
- Advocate for the State: State Counsel and Government Pleader
Link to Judgment
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