Simplified Explanation of the Judgment
This judgment of the Patna High Court deals with an important issue under the Bihar Goods and Services Tax Act, 2017 (BGST Act), particularly concerning best judgment assessment, delay in filing appeal, and the impact of a subsequent GST amnesty notification issued by the Central Government.
The dispute arose when a registered taxpayer (the petitioner) was subjected to an assessment order under Section 62 of the BGST Act. Section 62 allows the tax department to pass a “best judgment assessment” when a registered person fails to file returns despite notices. In this case, the assessment order was passed in September 2019.
Aggrieved by the assessment, the petitioner attempted to challenge it by filing an appeal under Section 107 of the BGST Act. However, the appeal was filed beyond the maximum permissible time limit, including the condonable delay period provided under Section 107(4). Because of this statutory delay, the appellate authority dismissed the appeal in August 2022, without going into the merits of the case.
After losing the statutory appeal, 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.
At the outset, the High Court made it clear that challenging an assessment order directly under Article 226 is generally not permissible, especially when the statute provides a complete appellate mechanism. Since the petitioner had already exhausted the appellate remedy and failed due to limitation, the Court noted that the writ petition was not maintainable on that ground.
However, the case took an important turn due to a policy change by the Central Government.
During the pendency of the writ petition, the Central Government issued Notification No. 06/2023 dated 31 March 2023, based on the recommendations of the GST Council. This notification granted a special one-time opportunity to registered persons whose best judgment assessments were passed under Section 62 on or before 28 February 2023.
Under this notification, if such a registered person:
- Furnishes the pending return on or before 30 June 2023, and
- Pays the applicable tax along with interest under Section 50,
then the assessment order passed under Section 62 would be deemed to be withdrawn, irrespective of:
- Whether an appeal was filed or not, or
- Whether such appeal was dismissed earlier.
The High Court carefully examined this notification and observed that it was clearly intended to reduce litigation, encourage voluntary compliance, and give relief to taxpayers who had defaulted in filing returns.
In light of this notification, the Court held that the petitioner should be given the liberty to take advantage of the amnesty scheme. Instead of entertaining the writ petition on merits, the Court disposed of the case by granting permission to the petitioner to comply with the conditions of the notification.
The Court further clarified that once the petitioner files the return and pays the required tax and interest as per the notification, the assessment would have to be redone, as the earlier best judgment assessment would stand withdrawn by operation of law.
Thus, while the Court did not interfere with the assessment order directly, it provided meaningful relief by allowing the petitioner to regularize its tax position under the beneficial notification.
Significance or Implication of the Judgment
This judgment is significant for GST-registered businesses and professionals in Bihar for several reasons:
- It reinforces that writ jurisdiction cannot be used as a substitute for statutory appeals, especially when delay is attributable to the litigant.
- At the same time, it demonstrates the Court’s pragmatic and taxpayer-friendly approach when a beneficial government policy is introduced.
- The judgment highlights the importance of GST amnesty notifications, which aim to bring defaulters back into compliance rather than punish them endlessly.
- It sends a clear signal that taxpayers should remain alert to policy relaxations and compliance windows, even if earlier remedies have failed.
For the government, the decision supports the objective of improving revenue collection through compliance rather than prolonged litigation.
Legal Issue(s) Decided and the Court’s Decision with Reasoning
- Whether a writ petition is maintainable against an assessment order after dismissal of appeal due to limitation
→ The Court held that such a challenge under Article 226 is generally not permissible. - Effect of Notification No. 06/2023 on pending or concluded assessment disputes
→ The Court held that the notification grants a fresh statutory opportunity overriding earlier assessments under Section 62. - Whether relief can be granted despite dismissal of appeal
→ Yes, relief can be granted if the taxpayer complies with the conditions of the amnesty notification. - Final Decision
→ The writ petition was disposed of, granting liberty to the petitioner to comply with Notification No. 06/2023, leading to reassessment.
Case Title
Aditya Ceramics, Vs. The State of Bihar
Case Number
Civil Writ Jurisdiction Case No. 877 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
- Government Pleader for the Respondent State Authorities
Link to Judgment
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