In a recent ruling, the Patna High Court imposed a fine of Rs 5,000 on a Goods and Services Tax ( GST ) officer for what the court deemed forcible and illegal recovery of the full tax amount from an individual awaiting the statutory right to appeal before the non-functional GST tribunal in Bihar. The court directed the department to reimburse the entire collected tax within 2 weeks.
With the GST tribunal non-operational in Bihar, the high court granted individuals seeking recourse the permission to make a bona fide payment of 20% of the total assessed amount, pending the initiation of the tribunal’s operations.
The petitioner’s counsel informed the court that the assistant commissioner of the Patliputra circle of the commercial taxes department issued an assessment order of Rs 52 crore on February 17, 2022.
Despite initiating a first appeal against the inflated assessment, the appeal was dismissed on September 21, 2022. Given the unavailability of the GST appellate tribunal, the petitioner company adhered to the GST law, depositing 20% of the assessed amount to facilitate an appeal once the tribunal becomes operational in Bihar.
The division bench, led by Chief Justice K Vinod Chandran and Justice Rajiv Roy, issued the judgment providing relief to the National Insurance Company’s Patna regional office, which had filed a writ application. The court directed the state commercial taxes department to reimburse the entire forcibly collected tax amount within a stipulated two-week period.
However, despite the department initially acknowledging the statutory deposit, a fresh demand notice was issued in January of the subsequent year, seeking the recovery of the entire remaining assessed amount. In response to the petitioner’s writ application challenging this latest demand notice, the department allegedly retaliated by forcefully recovering the outstanding amount of approximately Rs 42 crore, employing coercive measures. The court’s intervention, along with the imposed penalty, seeks to rectify what it perceives as an unjust and coercive action by the GST officer
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