M/s Moral Pharmaceuticals Private Limited vs The Union of India

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.5336 of 2025
======================================================
M/s Moral Pharmaceuticals Private Limited a Private Limited Company
having GSTIN- 10AAGCM8051Q1Z7, and Principal Place of Business at 1st,
Ground Floor, Mohnikunj, Ramvilash Path, Sandalpur Road, Kumahrar,
Patna, Bihar, 800006 through its Authorised Signatory Sachendra Kumar
Maurya, Gender- Male, aged about 36 years, Son of Sri Raju Maurya,
Resident of 307- 631, Fatehpur, Post- Fatehpur, District- Fatehpur, Uttar
Pradesh- 212601.
... ... Petitioner
Versus
1. The Union of India through the Finance Secretary, Department of Revenue,
Govt. of India, New Delhi.
2. The Government of India, Ministry of Finance (Department of Revenue),
through the Director- CBIC, New Delhi.
3. The Superintendent (Adjn), CGST and CX (H), Central GST and Central
Excise Department), Patna-1.
4. The Joint Commissioner, Central GST and Central Excise Department),
Patna-1, (Central GST and Central Excise Department), Patna.
5. The State of Bihar through The Principal Secretary, State Tax, (Department
of State Tax) Bihar, Patna having its office at Kar Bhawan, Beerchand Patel
Path, Patna.
6. The Principal Secretary cum Commissioner, Department of State Taxes,
Government of Bihar, Patna.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Bijay Kumar Gupta, Advocate
Mr. Manish Kumar, Advocate
For the U.O.I. : Dr. K.N. Singh, A.S.G.
Mr. Anshuman Singh, Sr. S.C., CGST & C
For the State : Mr. Alok Kumar Agarwal, (AAG-5)
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE SUNIL DUTTA MISHRA
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 18-09-2026
Heard learned counsel for the petitioner and learned
Senior Standing Counsel for the Union of India and learned
Additional Advocate General-5 for the State.

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2. This writ petition has been preferred seeking
following reliefs:-
"i). For issuing a writ of certiorari or any other
appropriate writ quashing/ setting aside
Circular No. - 3/3/2017-GST dated
05.07.2017, Circular No. 31/05/2018-GST
dated 09.02.2018 and Circular No.
169/01/2022 GST dated 12.03.2022 which
were issued by the Central Board of Indirect
Taxes and Customs (Board) which had no
powers to issue the same and based thereon to
confer any power of assignment of functions
of the 'proper officer' upon Central Tax
Officers for issuing any kind of notices, show
cause notices and orders under Section 73 and
S 74 and thereby consequent notice, show
cause notice and order of demand are not
legally valid and without authority of law
(Annex-P-1 & Annex- P-2). It is to be
submitted that power of appointment of the
Board cannot be equated with the power of
assignment for qualifying as proper officer.
ii) For the Show cause Notice vide process No-
3954 dated 12.07.2024 (as contained in
Annexure-p1) without digitally signed and
Summary of Show Cause Notice vide
Reference No- ZD100724032789A dated
23.07.2024 unsigned (as contained in
Annexure-P1A) issued by the Respondent
No.-04 for demanding tax, interest and
penalty Rs 2,55,00,073 under the CGST and
2,55,00,073 SGST Act, total amounting to Rs.
5,10,00,146 for the period July 2017 to
March-2018 under S 74(1) BGST/CGST Act,
2017 be quashed as the Show Cause Notice
was issued without fulfilment of the
mandatory pre-conditions mentioned in the
Section 74 itself and also without a digital
signature as required by Rule 26(3) of the
BGST/CGST Rules 2017 and in violation of
Instruction No-04/2023 dated GST dated
23.11.2023 and Instruction No-05/2023 dated

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GST dated 13.12.2023 be set aside and
quashed.
iii) The demand order No-69/GST/J/C/2024-25
dated 13.11.2024 (as contained as Annexure-
P-2) without digitally signed and Summary of
demand order vide Reference No-
ZD1012240008740, dated 03.12.2024 (as
contained in Annexure-P-2A) in form of
DRC-07 without any signature passed by the
Respondent No-04 demanding tax, interest
and penalty Rs. 2,91,39,160.00 under the
CGST and 2,91,39,160.00 BGST Act, total
amounting to Rs.5,82,78,320/- for the period
July 2017 to March-2018 under Section 74(9)
BGST/CGST Act, 2017 without fulfilment of
the mandatory pre-conditions mentioned in
the Section 74 itself and also without a digital
signature as required by Rule 26 (3) of the
BGST/CGST Rules 2017 and in violation of
Instruction No-04/2023 dated GST dated
23.11.2023 and Instruction No-05/2023 dated
GST dated 13.12.2023 be set aside and
quashed.
iv) For issuing a writ of certiorari or any other
appropriate writ quashing/setting aside show
cause notices dated 12.07.2024 and order
dated 13.11.2024 passed by the Respondent
No-04 as the show cause notice and order are
barred by the time limit specified under
Section 73(10) to pass order under S 73(9) of
the CGST/BGST Act, 2017 and extended
period of limitation as available under S.74
CGST/BGST Act, 2017 is not applicable in
this case as necessary pre-condition for
application of the provision of S.74 is not
available in this case.
v) The order vide Process No-69/GST/JC/2024-
25 dated 13.11.2024 (as contained as
Annexure-P-2) and Summary of demand
order vide Reference No-ZD1012240008740
dated 03.12.2024 (as contained in Annexure-
P-2A) in form of DRC-07 passed by the
Respondent No-04 demanding tax, interest
and penalty Rs. 2,91,39,160 under the CGST

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and 2,91,39,160 BGST Act, total amounting
to Rs.5,82,78,320 for the period July 2017 to
March-2018 in Form GST DRC-07 which
were passed without providing “Personal
Hearing” in violation of section 75(4)
BGST/CGST Act, 2017 and that is evident
from Annexure P-1A and so it is violative of
Principle of natural justice.
vi) For issuing of a writ of certiorari or any other
appropriate writ quashing/setting aside the
Order vide Process No-69/GST/JC/2024-25
dated 13.11.2024 (as contained as Annexure-
P-2) and Summary of demand order vide
Reference No-ZD1012240008740 dated
03.12.2024 (as contained in Annexure-P-2A)
in form of DRC-07 passed by the Respondent
No-04 demanding tax, interest and penalty Rs.
2,91,39,160 under the CGST and 2,91,39,160
BGST Act, total amounting to Rs.5,82,78,320
for the period July 2017 to March-2018 in
Form GST DRC-07 which were passed
without issuing GST ASMT-10 under Rule 99
BGST/CGST Rule 2017 read with Section 61
BGST/CGST Act 2017 and this render the
entire proceedings of the Respondent No-4
violative of principles of natural justice and
thus liable to be set aside."
Brief Facts of the Case
2. The factual matrix of this case are not in dispute. The
petitioner is a private limited company, having its principal place
of business at Patna in the State of Bihar. It is engaged in business
of supply of pharmaceutical goods. The petitioner was served with
a show-cause notice (Annexure-'P1' and Annexure- 'P-1A'). The
allegation against the petitioner was that it contravened the
provisions of Section 9 and Section 59 of Central Goods and

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Services Tax Act, 2017/Bihar Goods and Services Tax Act, 2017
(hereinafter referred to as the "CGST/BGST"). It was alleged that
the petitioner (hereinafter called the "noticee" or "the petitioner")
had made non/short payment of GST amounting to 5,10,00146/-
(Rupees Five Crore Ten Lakhs One Hundred Forty Six only)
(CGST Rs. 2,55,00,073/- and SGST Rs. 2,55,00,073/-) by way of
declaring a false and incorrect value of taxable supply during the
Financial Year 2017-18. The taxing authority took a view that the
said non-payment of tax appears to be recoverable under the
provisions of Section 74 (1) of the CGST/BGST along with
applicable interest in terms of Section 50 of the CGST/BGST and
penalty under Section 74(1) read with Section 122(2)(b) of the
CGST/BGST.
3. A perusal of Annexure 'P1' would show that non-
payment of the aforesaid amount of GST was detected on the basis
of data received from the Assistant Audit Officer, DGA (Central),
Lucknow at Patna. The data shared has been shown in the show-
cause notice (Annexure 'P1').
4. It is an admitted position that after receipt of the
show-cause notice, the petitioner submitted its response and also
participated in the hearing of the matter. It is the case of the
petitioner that the petitioner filed reply vide letter dated

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07.08.2024 by which they explained reasons for discrepancy in
GSTR-9C.
Submissions on behalf of Petitioner
5. It is contended before this Court that Circular No.-
3/3/2017-GST dated 05.07.2017, Circular No. 31/05/2018-GST
dated 09.02.2018 and Circular No. 169/01/2022-GST dated
12.03.2022 issued by the Central Board of Indirect Taxes and
Customs (hereinafter referred to as the 'Board') were not within the
competence and the powers conferred upon the said Board. It is
submitted that the Board had no power to issue the circulars and
thereby to confer any power of assignment of functions of the
'proper officer' upon Central Tax Officers for issuing any kind of
notices, show-cause notices and orders under Section 73 and
thereby consequent notice, show-cause notice and order of demand
were not legally valid. It is submitted that these Circulars are liable
to be quashed.
6. Learned counsel for the petitioner submits that the
issue raised herein is illustrated by the Hon'ble Supreme Court in
Canon India Pvt. Ltd. v. Commissioner of Customs reported in
2021 SCC OnLine SC 200 which constitutes the analogous
provisions of the Customs Act, 1962. It is submitted that as per
Section 2(91) of the CGST Act, 'Proper Officer' means the

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'Commissioner' or the officer of the Central Tax who is assigned
that function by the Commissioner in the Board. Thus, according
to the petitioner, a person other than the Commissioner would not
qualify as 'Proper Officer' under Section 2 (91) of the CGST Act.
7. It is submitted that pre-test needs to be satisfied. First;
there has to be a valid appointment as Officer of the Central Tax,
Second; there has to be a valid entrustment or assignment of the
functions of the Proper Officer by the Board.
8. Learned counsel for the petitioner has further referred
Section 3 and Section 4 of the CGST Act to strengthen his
submissions.
9. In course of his arguments, learned counsel has taken
this Court through the judgment of the Hon'ble Bombay High
Court in the case of Fomento Resorts & Hotels Ltd. v. Union of
India reported in (2024) 159 taxmann.Com 577 (Bombay).
10. It is submitted that the identical issue had fallen for
consideration before the Hon'ble Bombay High Court in the case
of Fomento Resorts & Hotels Ltd. (supra) . The Hon'ble Bombay
High Court has held in favour of the Revenue but an appeal
against the said judgment of the Hon'ble Bombay High Court has
been taken to the Hon'ble Supreme Court where the matter is
pending consideration. At the first instance, learned counsel for the

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petitioner submitted that the matter may be adjourned for the
present as the issue is under consideration before the Hon'ble
Supreme Court, however, we called upon the learned counsel for
the petitioner to produce the order of the Hon'ble Supreme Court
saying that there is any direction/request to the High Courts not to
entertain an identical plea for consideration, learned counsel has
submitted that there is no such order of the Hon'ble Supreme
Court. In this view of the matter, we proceeded to hear this writ
application on its own merit.
11. So far as the issue with regard to the validity of the
Circulars are concerned, we find that the Hon'ble Bombay High
Court has taken note of the judgment of the Hon'ble Supreme
Court in the case of M/S Canon India Private Limited (supra) and
considered the distinction between the provisions of the Customs
Act and those of the CGST Act. We would reproduce paragraphs
'46' to '53' of the judgment of the Hon'ble Bombay High Court
hereinbelow for a ready reference:-
"46. Section 2(91) of the CGST Act inter alia
provides that in relation to any functions to be
performed under the CGST Act, means the
Commissioner or the officer of the central tax
who has assigned that function by the
Commissioner in the Board. Thus, the only
substantive difference between the definition
of “proper officer” under the Customs Act,
1962 and the “proper officer” under the CGST
Act is that the expression “officer of customs”

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appearing in Section 2(34) of the Customs Act
is replaced with the expression “officer of
central tax” in Section 2(91) of the CGST Act.
47. In Canon India (P) Ltd. (supra) and Sayed Ali
(supra), the notifications or the circulars
impugned therein were struck down because
an officer of DRI was not an “officer of
customs” as provided under Section 2(34) of
the Customs Act. In the present case,
however, there is no dispute and no such
dispute was ever raised about the officers of
the Audit Commissionerate, which includes
respondents no.4 and 5 as being the “officers
of central tax”. In paragraph 5 of the written
submissions fled by Mr Sachdeva on behalf of
the petitioner, it is clearly stated that “the
petitioner is not disputing the appointment of
Audit Commissionerate as Central Tax
Officers. In fact, the petitioner is raising the
challenge with regard to the source of power
of the Board in assigning functions of proper
officer to Audit Commissionerate. To
reiterate, the core of the challenge in this
petition is not of the manner of assignment
rather the enabling provision for such
assignment of function as Proper officer.

48. The above admission is more than sufficient to
distinguish the decisions in Canon India (P.)
Ltd. (supra) and Sayed Ali (supra). As noted
above, the issue involved in both these
decisions was whether an officer of DRI could
be appointed as a “proper officer” in terms of
Section 2(34) of the Customs Act without the
Central Government designating officers of
DRI as “customs officers”. Since it is
admitted that the officers of the Audit
Commissionerate are central tax officers,
based upon the decisions in Canon India (P.)
Ltd. (supra) and Sayed Ali (supra), at least,
the assignment of functions by the Board to
the central tax officers vide the impugned
circulars, cannot be faulted. Therefore, the

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contention-based upon Canon India (P.) Ltd.
(supra) and Sayed Ali (supra) cannot be
accepted.
49. In Yasho Industries Ltd. (supra), a Division
Bench of the Gujarat High Court comprising
Bela M. Trivedi, J. (as Her Ladyship then
was) and Ashokkumar C. Joshi, J. rejected a
contention similar to what is now raised on
behalf of the petitioner in the present petition.
The Division Bench also distinguished Canon
India (P.) Ltd.'s case (supra) and Sayed Ali
(supra). The relevant observations in this
regard are found in paragraph 14, which reads
as follows:- “[14] The submission of Mr.
Rastogi that the said assignment of function
has to be by way of Notification and not by
way of Circular in view of Section 167 of the
CGST Act is thoroughly misplaced. Section
167 of the CGST Act pertains to the
delegation of powers by the Commissioner
exercisable by any authority or officer under
the Act to be exercisable also by another
authority or officer as may be specified in the
Notification. So far as Section 2(91) is
concerned, it pertains to the proper officer in
relation to any function to be performed under
the CGST Act to be the Commissioner or the
officer of Central Tax, who is assigned that
function by the Commissioner in the Board.
Here the Board means the "Central Board of
Indirect Taxes and Customs" as defined in
Section 2(16) of the CGST Act. Vide the
Circular dated 5.7.2017 the said Board
namely the Central Board of Excise and
Customs in exercise of the powers conferred
by Section 2(91) of the CGST Act read with
Section 20 of the IGST Act and subject to
Section 5(2) of the CGST Act has assigned
the officers the functions as that of proper
officers in relation to the various Sections of
the CGST Act and the Rules made thereunder,
and as such the Superintendent of Central Tax
has been assigned the function of Section

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70(1) of the CGST Act. Thus, there being no
delegation of powers by the Commissioner,
the provisions contained in Section 167 of the
CGST Act could not be said to have been
attracted, nor was there any necessity to issue
Notification as sought to be submitted by Mr.
Rastogi. There could not be any disagreement
to the proposition of law laid down by the
Supreme Court in case of Canon India (P.)
Ltd. (supra) relied upon by the learned
Advocate Mr. Rastogi that when a statute
directs that the things to be done in a certain
way, it must be done in that way alone.
However, in the instant case, the Board has
assigned the officers to perform the function
as proper officers in relation to various
Sections of CGST Act and the Rules made
thereunder by issuing the Circular in question,
the question of issuing Notification for
delegation of powers by the Commissioner as
contemplated under Section 167 of the CGST
Act does not arise. Mr. Rastogi appears to
have misread the powers of the Board to
assign the officers to perform the function as
proper officers in relation to the various
Sections of the CGST Act, as the delegation
of powers by the Commissioner to the other
authority or the officer as contemplated in
Section 167 of the CGST Act. The Court,
therefore, does not find any substance in the
submission of Mr. Rastogi that the respondent
No.3 was not the 'proper officer' as per the
definition contained in Section 2(91) of the
CGST Act, and therefore, had no powers to
issue summons under Section 70 of the CGST
Act.”
50. The observation in Canon India (P.) Ltd.
(supra) in the context of the Central Board’s
notification dated 02.05.2012 to the effect that
Section 2(34) of the Customs Act does not
confer any powers on any authority to entrust
any functions to officers must be read in the
context of the attempt to confer powers on

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any authority to entrust any of the functions
under the Customs Act to officers other than
“officers of customs”. This was because
powers were purported to be assigned to the
officers of DRI, who were admittedly not the
officers of customs or who admittedly had not
been entrusted with the functions of officers
of customs.

51. Given the law in Union of India v/s. Dhanwanti
Devi (1996) 6 SCC 44, this would be a proper
manner of construing the precedent in Canon
India (P.) Ltd. (supra) or Sayed Ali (supra). In
such matters, it would not be proper to read a
sentence or a word torn out of the context in
which such sentence or word may have been
employed. Every judgment must be read as
applicable to the particular facts proved, or
assumed to be proved, since the generality of
the expressions which may be found there is
not intended to be the exposition of the whole
law but governed and qualified by the
particular facts of the case in which such
expressions are to be found. It would,
therefore, not be profitable to extract a
sentence here and there from the judgment
and to build upon it because the essence of the
decision is its ratio and not every observation
found therein.

52. Tough the impugned Circular dated 05.07.2017
does, inter alia, refer to Section 2(91) of the
CGST Act, it is not as if this definition clause
is the source of power under which the
impugned circular is issued. Section 3 of the
CGST Act, as noted earlier, empowers the
Government, by notification, to appoint
certain classes of officers for the purposes of
the CGST Act. Accordingly, in the exercise of
powers conferred by Section 3 r/w Section 5
of the CGST Act and Section 3 of the IGST
Act, the Central Government, vide
notification dated 19.06.2017, has already
appointed certain central tax officers and

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central tax officers subordinate to them for the
purposes of the CGST Act and vested in them
all powers under the CGST Act and IGST Act
and Rules made thereunder with respect to the
jurisdiction specified in the tables given
below the said notifications.
53. Thus, in the present case, not even any dispute
was raised about the officers referred to in the
impugned circulars being central tax officers.
Section 4 of the CGST Act provides that the
Board may, in addition to the officers as may
be notified by the Government under section
3, appoint such persons as it may think it to be
the officers under the CGST Act. Without
prejudice to the provisions of sub-section (1)
of Section 4, the Board may, by order,
authorise any officer referred to in clauses (a)
to (h) of Section 3 to appoint officers of
central tax below the rank of Assistant
Commissioner of Central Tax for the
administration of the CGST Act."
Submissions on behalf of Respondents
12. Learned senior standing counsel for the CGST and
CX submits that the views expressed by the Hon'ble Bombay High
Court are well reasoned and this Court may be persuaded to take
the same view. We have considered this aspect of the matter. An
analysis of the Notification dated 19.06.2017 and the other two
Circulars would lead this Court to agree with the views expressed
by the Hon'ble Bombay High Court. These Circulars have been
issued by the Central Government and the Board had exercised
their powers vested in them under Sections 3 and 5 of the CGST
Act. The matter of assigning the functions of 'proper officer' upon

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the Commissioner or the officers of the Central Tax, the Central
Government has issued the Notification dated 19.06.2017
(Annexure-1), in exercise of powers conferred by Section 3 read
with Section 5 of the CGST Act. In the other two circulars,
functions have been assigned under Section 74 of the Sub-ordinate
Officers of Central Tax by specifying the monetary limits. Based
upon the monetary limits so prescribed, Respondent No. 4 has
issued the impugned show cause notice. We fully agreed with the
reasoning and rationale provided by the Hon'ble Bombay High
Court in its judgment.
Consideration
13. Now, in our considered opinion, the pleas
questioning three circulars have no basis to stand.
14. Now, coming to the impugned order, as contained in
Annexure-'P2' in this writ application, this Court finds that
Annexure-'P2' was passed by the competent authority after
considering the defence reply and the documents which were
brought to the notice of Respondent No. 4, those are duly recorded
in paragraph '11' of the impugned order. The petitioner/ noticee
was also given an opportunity of personal hearing in this matter.
After considering the defence reply and the documents,
Respondent No. 4 recorded his findings thereon. What has

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prevailed upon Respondent No. 4 may be found in the discussions
and findings recorded by the Respondent No. 4 (Annexure-'P2').
We extract the relevant paragraphs hereunder for a ready
reference:-
"It is explicit from discussions, findings and
computation of tax as made herein above that
the tax liability on the amounts of sales turnover,
reported as 'consignment sales' in the submitted
reconciliation worksheet, has not been
discharged under any of the four GSTINs held
by the noticee company. As the amount of
'consignment sale' has not been declared under
any of the four annual returns in Form GSTR-9
and since such consignment sales are part of un-
reconciled turnover of 18,21,43,381/- as also
₹
reported under Table-6 of GSTR-9C, hence, it is
concluded that the noticee have suppressed a
part of the turnover amounting to
₹
10,40,68,429/-, which has been considered as
taxable value under Section 15(1) of
CGST/SGST Act, 2017, and have not discharged
the tax liability thereon amount to
₹
2,91,39,160/- (Rupees Two Crore Ninety One
Lakh Thirty Nine Thousand One Hundred Sixty
Only) for the period July 2017 to March 2018.
21. Invoking extended period of limitation due to
suppression of facts:-
I find that GST is a self-assessment tax as
provided under Section 59 of the CGST/BGST
Act, 2017. Hence, it is incumbent upon every
taxable person to determine the taxability of
every transaction, compute the applicable tax,
discharge such ax applicable and report the same
without any interjection of the revenue
authorities. Further, in terms of the explanation 2
of Section 74 of CGST/BGST Act, 2017-'for the
purpose of this act, the expression "suppression"
shall mean non-declaration of facts or

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information which a taxable person is required
to declare in the returns, statement, report or any
other document furnished under this Act or the
rules made thereunder, or failure to furnish any
information on being asked for, in writing by the
proper officer'. I find that the noticee have
suppressed a part of the turnover including the
turnover related to consignment sales as
discussed under Para No. 20 above and have
also misstated the figures of total turnover in the
State and turnover related to VAT period of
April' 2017-June'2017 in GSTR-9C, by reason
of fraud, wilful-misstatement and suppression of
facts. Moreover, it is also seen that noticee with
intent to evade payment of tax had not furnished
the documents/ information on being asked by
the Range Superintendent. Hence, I concluded
that extended period of limitation under Section
74 (1) of the Act has rightly been invoked in the
instant case.
22. In view of the discussions made in paras above,
I conclude that the noticee has violated the
provisions of Section 9 and Section 59 of the
CGST Act, 2017 read with Rule 59 of the Rules,
2017. Therefore, the noticee is liable to pay
₹
2,91,39,160/- (Rupees Two Crore Ninety One
Lakh Thirty Nine Thousand One Hundred Sixty
only) [CGST 1,45,69,580/-+ SGST
₹ ₹
1,45,69,580/-] out of the total demand of
₹
5,10,00,146/- (CGST 2,55,00,073/- + SGST
₹ ₹
2,55,00,073/-) proposed in the impugned SCN
under Section 74(1) of the CGST Act, 2017 and
the balance amount of demand of
₹
2,18,60,986/- (Rupees Two Crore Eighteen
Lakh Sixty Thousand Nine Hundred Eighty Six
only) is liable to be paid under Section 50 of
CGST/BGST Acts. I also find that the noticee
has not correctly assessed and discharged the
due tax on the part of un-reconciled turnover, as
determined above, for the period July 2017 to
March 2018 and thus have contravened the
provision of Section-9 and Section-59 by

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suppressing the material facts from the
Department and therefore the noticee is liable
for penalty under Section 122(2) (b) read with
Section 74(1) of the CGST/BGST Acts for the
contraventions of the provisions of the Acts, as
cited supra.
23. In the light of the discussions and findings made
herein above and the statutory definition of
suppression as provided under explanation 2 to
Section 74 of CGST/BGST Act, 2017, I find
and hold that tax of 2,91,39,160/- (Rupees
₹
Two Crore Ninety One Lakh Thirty Nine
Thousand One Hundred Sixty only) [CGST
₹
1,45,69,580/- + SGST 1,45,69,580/-] along
₹
with applicable interest under Section 50(1) of
the Acts read with Rule 88B of CGST/BGST
Rules, 2017, for the period from July 2017 to
March 2018, is liable to be demanded and
recovered by invoking the extended period of
limitation under Section 74(1) of the said Acts
for contraventions of the provisions of Sections
9 and 59 of CGST/BGST Act, 2017. I drop the
balance amount of demand of 2,18,60,986/-
₹
(Rupees Two Crore Eighteen Lakh Sixty
Thousand Nine Hundred Eighty Six only) out of
the total demand of 5,10,00,146/- (CGST
₹ ₹
2,55,00,073/- + SGST 2,55,00,073/-) as
₹
proposed in the impugned SCN. I further find
that Section 74 of the CGST Act, 2017
prescribes imposition of penalty in case of
fraud, wilful-misstatement and suppression of
facts. In the instant case, I find that the noticee
have suppressed the material facts as discussed
in the foregoing paras and also willfully
misstated the facts in their GST returns with
intend to evade tax. Hence, I find and hold that
the noticee is liable for imposition of penalty of
2,91,39,160/- (Rupees Two Crore Ninety One
₹
Lakh Thirty Nine Thousand One Hundred Sixty
only) [CGST 1,45,69,580/- + SGST
₹ ₹
1,45,69,580/-], equivalent to the tax demanded,

Patna High Court CWJC No.5336 of 2025 dt.18-09-2026
18/20
under Section 74(1) of the CGST/BGST Acts
read with Section 122(2)(b) of the Acts for
contravention of the provisions of Acts as cited
supra."
15. The impugned order (Annexure-'P2') is an
appealable order.
16. Having heard learned counsel for the petitioner and
the learned senior standing counsel for the department, we have
found that the petitioner has got a statutory remedy against the
impugned order. We keep in mind that the availability of an
alternative statutory remedy alone would not be a ground to oust
the petitioner from a writ remedy in this Court. We are aware of
the limitations and circumstances under which a writ petition may
be entertained despite there being an alternative remedy. In the
case of CIT v. Chhabil Dass Agarwal reported in (2014) 1 SCC
603 , the Hon'ble Supreme Court has held in paragraphs '15' and
'16' as follows:-
"15. Thus, while it can be said that this Court has
recognised some exceptions to the rule of
alternative remedy i.e. where the statutory
authority has not acted in accordance with the
provisions of the enactment in question, or in
defiance of the fundamental principles of judicial
procedure, or has resorted to invoke the provisions
which are repealed, or when an order has been
passed in total violation of the principles of
natural justice, the proposition laid down in
22
Thansingh Nathmal case , Titaghur Paper Mills
22. AIR 1964 SC 1419

Patna High Court CWJC No.5336 of 2025 dt.18-09-2026
19/20
3
case and other similar judgments that the High
Court will not entertain a petition under Article
226 of the Constitution if an effective alternative
remedy is available to the aggrieved person or the
statute under which the action complained of has
been taken itself contains a mechanism for
redressal of grievance still holds the field.
Therefore, when a statutory forum is created by
law for redressal of grievances, a writ petition
should not be entertained ignoring the statutory
dispensation.
16. In the instant case, the Act provides complete
machinery for the assessment/reassessment of tax,
imposition of penalty and for obtaining relief in
respect of any improper orders passed by the
Revenue Authorities, and the assessee could not
be permitted to abandon that machinery and to
invoke the jurisdiction of the High Court under
Article 226 of the Constitution when he had
adequate remedy open to him by an appeal to the
Commissioner of Income Tax (Appeals). The
remedy under the statute, however, must be
effective and not a mere formality with no
substantial relief. In Ram and Shyam Co. v. State
40
of Haryana this Court has noticed that if an
appeal is from “Caesar to Caesar's wife” the
existence of alternative remedy would be a mirage
and an exercise in futility."
17. We find that none of the above grounds is available
to avoid the alternative statutory remedy. Sitting in our writ
jurisdiction, we would not act as a fact finding body by re-
appreciating the documents filed by the petitioner before
Respondent No. 4. It is the First Appellate Authority who will be
3. Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131
40. (1985) 3 SCC 267

Patna High Court CWJC No.5336 of 2025 dt.18-09-2026
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in a position to re-appreciate the same and consider the contents of
the documents.
18. While declining to entertain the writ application
against the impugned order, we grant liberty to the petitioner to
seek statutory remedy of appeal, if so advised, in accordance with
law within a period of 30 days from today.
19. This writ application was preferred before this Court
on 07.03.2025. The writ application remained pending before this
Court till date. Thus, the writ application has been preferred within
a period of 30 days after expiry of three months prescribed period
for filing appeal under Section 107(4) of the CGST/BGST Act. We
are of the opinion that the appellate authority would not oust the
petitioner on the ground of limitation.
20. This writ petition stands disposed of accordingly.
(Rajeev Ranjan Prasad, J)
(Sunil Dutta Mishra, J)
Rakhi/ Koustav/
AFR/NAFR
CAV DATE N.A.
Uploading Date 21.09.2026
Transmission Date