Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility Ltd) vs The State of Bihar
- Court
- Patna High Court
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.9321 of 2025
======================================================
Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility
Ltd) a Company incorporated under the Companies Act, 1956 having its
office at 6B/19, Asha Niketan, Tilak Marg, North S.K. Puri, Patna-800013
through its Commercial Co-ordinator, Debnath Mukherjee (Male, aged about
41 Years), son of Shri Shyama Prasad Mukherjee, resident of 162, Uttar
Subhash Pally, Dankuni, Hooghly, West Bengal - 712311.
... ... Petitioner/s
Versus
1. The State of Bihar through Commissioner of Commercial Taxes, Bihar,
Patna having its office at Vikas Bhawan, Patna.
2. Joint Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
3. Asst. Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 9436 of 2025
======================================================
Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility
Ltd) a Company incorporated under the Companies Act, 1956 having its
office at 6B/19, Asha Niketan, Tilak Marg, North S.K. Puri, Patna-800013
through its Commercial Co-ordinator, Debnath Mukherjee (Male, aged about
41 Years), son of Shri Shyama Prasad Mukherjee, resident of 162, Uttar
Subhash Pally, Dankuni, Hooghly, West Bengal - 712311.
... ... Petitioner/s
Versus
1. The State of Bihar through Commissioner of Commercial Taxes, Bihar,
Patna having its office at Vikas Bhawan, Patna.
2. Joint Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
3. Asst. Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 9503 of 2025
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
2/25
======================================================
Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility
Ltd) a company incorporated under the Companies Act, 1956 having its office
at 6B/19, Asha Niketan, Tilak Marg, North S.K. Puri, Patna - 800013 through
its Commercial Co-ordinator, Debnath Mukherjee (Male, aged about 41
Years), Son of Shri Shyama Prasad Mukherjee, resident of 162, Uttar Subhash
Pally, Dankuni, Hooghly, West Bengal- 712311.
... ... Petitioner/s
Versus
1. State of Bihar through Commissioner of Commercial Taxes, Bihar, Patna
having its Office at Vikas Bhawan, Patna.
2. Joint Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
3. Asst. Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 9517 of 2025
======================================================
Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility
Ltd) a Company incorporated under the Companies Act, 1956 having its
office at 6B/19, Asha Niketan, Tilak Marg, North S.K. Puri, Patna-800013
through its Commercial Co-ordinator, Debnath Mukherjee (Male, aged about
41 Years), son of Shri Shyama Prasad Mukherjee, resident of 162, Uttar
Subhash Pally, Dankuni, Hooghly, West Bengal - 712311.
... ... Petitioner/s
Versus
1. The State of Bihar through Commissioner of Commercial Taxes, Bihar,
Patna having its office at Vikas Bhawan, Patna.
2. Joint Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
3. Asst. Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna
... ... Respondent/s
======================================================
with
Civil Writ Jurisdiction Case No. 9528 of 2025
======================================================
Amara Raja Batteries Ltd. (now known as Amara Raja Energy and Mobility
Ltd) a company incorporated under the Companies Act, 1956 having its office
at 6B/19, Asha Niketan, Tilak Marg, North S.K. Puri, Patna - 800013 through
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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its Commercial Co-ordinator, Debnath Mukherjee (Male, aged about 41
Years), Son of Shri Shyama Prasad Mukherjee, resident of 162, Uttar Subhash
Pally, Dankuni, Hooghly, West Bengal- 712311.
... ... Petitioner/s
Versus
1. State of Bihar through Commissioner of Commercial Taxes, Bihar, Patna
having its Office at Vikas Bhawan, Patna.
2. Joint Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
3. Asst. Commissioner of Commercial Taxes, Patliputra Circle, having its
office at Kar Bhawan, Bir Chand Patel Path, Patna.
... ... Respondent/s
======================================================
Appearance :
(In all the cases)
For the Petitioner/s : Mr. D. V. Pathy, Sr. Adv.
Mr. P. K. Mishra
Mr.Sadashiv Tiwari
Ms. Shivani Dewalla
Mr. Hitesh Karan
For the Respondent/s : Mr. Vivek Prasad, GP 7
======================================================
CORAM: HONOURABLE MR. JUSTICE ANIL KUMAR SINHA
and
HONOURABLE MR. JUSTICE VIKASH KUMAR
JUDGMENT AND ORDER
C.A.V.
(Per: HONOURABLE MR. JUSTICE ANIL KUMAR SINHA)
Date : 06-11-2026
Since all these five writ applications involve common
question of law and fact, with the consent of the parties, all these
applications have been heard together and are being decided by
this common judgment/order.
2. In all these five writ applications, the petitioner has
made common prayer for quashing of the order, dated 13.03.2025,
as contained in Annexure P/10, whereby the applications of the
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petitioner seeking settlement of tax dispute for the tax period
2007-08, 2013-14, 2014-15, 2015-16 and 2017-18, under the Bihar
Settlement of Taxation Disputes Act, 2024 (in short, “the
Settlement Act”), has been rejected. The petitioner further seeks
for a direction upon the respondents to issue the requisite
certificate/order of settlement in accordance with the provisions of
the Settlement Act and the Bihar Settlement of Taxation Disputes
Rules, 2024 (in short, “the Settlement Rules”).
3. Since the facts in all these writ applications are more
or less similar, as such, for the sake of brevity, the facts are being
taken from CWJC No. 9321 of 2025.
4. The petitioner is a limited company, engaged in the
manufacture and sale of automotive and industrial batteries, in the
brand name of Amaron Battery. In respect of the tax period 2007-
08, the petitioner duly filed its return under the Bihar Value Added
Tax Act, 2005 (hereinafter referred to as the “VAT Act”) on
31.12.2008, disclosing therein its taxable transactions and the tax
liability arising therefrom. In the said return, the petitioner
disclosed output tax of Rs. 1,16,74,142/-, against which it claimed
set-off of Entry Tax amounting to Rs. 91,51,103/-, and discharged
the balance tax liability of Rs. 25,14,577/- by cheque. According to
the petitioner, the entire amount of tax admitted and disclosed by it
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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in its return stood duly discharged. There was no admitted tax
liability remaining unpaid by the petitioner in respect of the tax
period in question.
5. The assessment proceedings were undertaken by the
Assistant Commissioner of Commercial Taxes, Patliputra Circle-
respondent no. 3, under the provisions of the VAT Act, culminating
in the assessment order, dated 24.05.2010. By the said assessment
order, the tax liability was determined at Rs. 1,17,70,862/-, while
the petitioner's claim towards Entry Tax set-off was allowed only
to the extent of Rs. 82,92,289/-, as against the claim of Rs.
91,51,103/- as per the return. After giving credit for the tax already
paid and the Entry Tax set-off allowed, a further demand of
Rs.9,66,167/- was raised against the petitioner. Consequentially, a
demand notice, dated 28.05.2010, was issued.
6. The additional demand essentially arose on account of
its disallowance of a part of the petitioner's claim for Entry Tax
set-off in respect of batteries supplied by the petitioner to its
customers by way of free replacement. The amount relatable to
such disallowance was Rs. 8,58,814/-.
7. Being aggrieved by the assessment order, dated
24.05.2010, the petitioner preferred a statutory appeal before the
Joint Commissioner of Commercial Taxes (Appeal), Central
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Division, Patna. The said appeal was admitted by order, dated
05.04.2011. While admitting the appeal, the appellate authority
took note of the return filed by the petitioner and the tax disclosed
and paid thereunder. During the pendency of the appeal, the
petitioner further deposited a sum of Rs.3,38,104/- towards tax,
interest and penalty.
8. The appeal was dismissed by order, dated 28.11.2012.
Aggrieved thereby, the petitioner preferred a further appeal before
the Commercial Taxes Tribunal, Bihar, Patna. The appeal before
the Tribunal also came to be dismissed on 07.02.2025.
9. The petitioner thereafter filed M. A. No. 565 of 2025,
which is still pending before this Court.
10. During the pendency of the appeal before the
Tribunal, the State Legislature enacted the Bihar Settlement of
Taxation Disputes Act, 2024, which was published in the Official
Gazette on 14.03.2024. The Settlement Act introduced a statutory
mechanism for settlement of specified pending taxation disputes,
subject to the conditions and manner prescribed therein and under
the Settlement Rules.
11. Being eligible to avail the benefit of the statutory
settlement mechanism, the petitioner submitted an application in
Form-I on 19.07.2024 in respect of the tax dispute pertaining to
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the tax period 2007-08. The said application was duly
acknowledged by the concerned authority in Form-II on
29.07.2024. Along with the application, the petitioner furnished
the requisite particulars relating to the arrears, the amount already
paid and the amount proposed to be paid under the settlement
scheme.
12. The respondent no.2 issued an order, dated
31.07.2024, in Form-IV. In the said order, the amount of tax in
dispute, as disclosed in Form-I, was noticed as Rs. 9,63,396/-. The
respondent no. 2 determined the settlement liability at Rs.
8,67,276/-, which included an amount of Rs. 33,848/- towards
assessed tax, and directed the petitioner to deposit Rs. 5,67,276/-
towards admitted tax and Rs. 33,849/- towards assessed tax, after
allowing credit of Rs. 3,00,000/- stated to have been paid
subsequent to the assessment.
13. The petitioner disputed the aforesaid computation
and submitted detailed objections/representations dated
08.08.2024, 10.09.2024 and 24.10.2024. The petitioner
specifically contended that the admitted tax for the purposes of the
Settlement Act could only be the amount disclosed by the
petitioner as payable in its return, amounting to Rs. 1,16,74,142/-,
against which the petitioner had already discharged its liability in
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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accordance with the return. It was further contended that the
amount arising from the disallowance of the Entry Tax set-off
constituted an assessment dispute and were the subject-matter of
the assessment as well as subsequent appellate proceedings.
Accordingly, the said disputed amount could not, according to the
petitioner, be treated as “admitted tax” for the purposes of the
settlement scheme.
14. Thereafter, respondent no. 2 passed an order, dated
27.11.2024. While referring to the assessment order and noticing
that Entry Tax set-off of Rs. 82,92,289/- has been allowed as
against the claim of Rs. 91,51,103/-, the respondent no. 2
proceeded on the basis that after allowing the admissible set-off,
an amount of Rs. 33,81,853/- remained payable towards admitted
tax. The objections raised by the petitioner were accordingly
rejected and the petitioner was directed to make payment in terms
of the earlier Form-IV communication.
15. The facts, giving rise to CWJC No. 9517 of 2025, is
similar to that of CWJC No. 9321 of 2025. The only difference is
that it relates to the tax period 2013-14, and there is difference in
the disclosed output tax (Rs. 5,73,29,796/-), amount claimed as
set-off of Entry Tax (Rs.4,88,00,579/-), and the amount of
discharge of balance tax liability by cheque (Rs.96,94,996/-). But
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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the respondent no. 2 allowed the amount of Entry Tax set-off to the
extent of Rs. 4,18,42,775/-, as against the claim of Rs. 4,88,00,579
and a further demand of Rs. 57,92,025/- was raised against the
petitioner.
16. The facts, giving rise to CWJC No. 9528 of 2025, is
also similar to that of CWJC No. 9321 of 2025. The only
difference is that it relates to the tax period 2014-15, and there is
difference in the disclosed output tax (Rs. 7,19,87,485/-), amount
claimed as set-off of Entry Tax (Rs. 6,15,34,035 /-), and the
amount of discharge of balance tax liability by cheque (Rs.
1,04,53,539/-). But the respondent no. 2 allowed the amount of
Entry Tax set-off to the extent of Rs. 6,09,37,114/-, as against the
claim of Rs. 6,15,34,035/- and a further demand of Rs. 6,56,515/-
was raised against the petitioner.
17. The facts, giving rise to CWJC No. 9436 of 2025, is
also similar to that of CWJC No. 9321 of 2025. The only
difference is that it relates to the tax period 2015-16, and there is
difference in the disclosed output tax (Rs. 10,36,86,206/-), amount
claimed as set-off of Entry Tax (Rs. 9,12,14,835/-), and the amount
of discharge of balance tax liability by cheque (Rs. 1,38,87,370/-).
But the respondent no. 2 allowed the amount of Entry Tax set-off
to the extent of Rs. 7,66,51,777/-, as against the claim of Rs.
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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9,12,14,835/- and a further demand of Rs. 1,51,19,119/- was raised
against the petitioner.
18. The facts, giving rise to CWJC No. 9503 of 2025, is
also similar to that of CWJC No. 9321 of 2025. The only
difference is that it relates to the tax period 2017-18, and there is
difference in the disclosed output tax (Rs. 4,67,83,115/-), amount
claimed as set-off of Entry Tax (Rs. 3,81,05,216/-), and the amount
of discharge of balance tax liability by cheque (Rs. 92,44,539/-).
But the respondent no. 2 allowed the amount of Entry Tax set-off
to the extent of Rs. 2,82,22,565/-, as against the claim of Rs.
3,81,05,216/- and a further demand of Rs. 90,16,153/- was raised
against the petitioner.
19. Mr. D. V. Pathy, learned Senior Counsel appearing
on behalf of the petitioner in all the five writ applications, argued
that the entire approach adopted by respondents is contrary to the
statutory scheme. Section 2(b) of the Settlement Act defines
"admitted tax" to mean the amount of tax admitted as being
payable in the returns filed by the party under the relevant law.
Therefore, once the petitioner has disclosed tax in its return and
has admittedly discharged the said liability, the said amount
constitutes the admitted tax for the purposes of the Settlement Act.
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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20. It has been submitted that the Entry Tax set-off was
claimed in the return and the balance tax was paid by the
petitioner. The subsequent disallowance by the assessing authority
of a portion of the claim of set-off will not retrospectively convert
the tax admitted in the return into the “admitted tax” under the
Settlement Act.
21. The disallowed Entry Tax set-off was the very
subject-matter of the assessment dispute and subsequent appeal.
Therefore, it fell within the statutory concept of a “dispute” and
“disputed amount”. The Settlement Act itself contemplates
settlement of arrears arising from the orders of assessment and
separately prescribes the settlement amount applicable to such
disputed arrears.
22. Section 3 of the Settlement Act, under which, in
respect of an ordinary arrears of tax, the settlement amount is
prescribed at 35 per cent of the arrears of tax in dispute or the
amount already paid towards such arrears, whichever is higher.
With regard to the disputes arising out of orders levying penalty,
fine or interest, the statute prescribes 10 per cent of the disputed
amount or the amount already paid, whichever is higher. The
statute further specifically provides that the settlement amount
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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does not include any payment towards arrears of admitted tax and
the party is required to deposit the total admitted tax separately.
23. The explanation of Section 3 of the Settlement Act
says that for the purposes of this sub-section, the expression
"settlement amount" shall not include any payment towards any
arrears of admitted tax and the party shall deposit the total amount
of admitted tax.
24. It is, therefore, submitted that the statutory scheme
itself maintains a clear distinction between admitted tax, arrears of
tax in dispute, penalty, interest or fine in dispute and settlement
amount payable for resolution of the dispute.
25. Learned Senior Counsel next submits that
respondent no. 2 has effectively obliterated this statutory
distinction by treating the disputed portion arising from
disallowance of Entry Tax set-off as admitted tax.
26. It is further submitted that Rule 4 of the Settlement
Rules requires the prescribed authority to verify the computation
of the disputed amount, payments made, settlement amount and
other particulars furnished in Form-I. If any discrepancy is found
in Form I, the authority is required to communicate the deficiency
in Form III or require production of evidence of payment in Form
IV. The Settlement Rules do not authorize the authority to reject an
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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application in Form I by mechanically treating the entire disputed
demand as admitted tax. The Settlement Rules contemplate a
determination and computation in accordance with the Settlement
Act.
27. The impugned order is a printed/formatted order,
which merely refers back to the earlier communication and does
not deal with the objections raised by the petitioner. It is, therefore,
contended that the order is non-speaking, arbitrary and violative of
the principles of natural justice.
28. Learned Senior Counsel has placed reliance on a
decision of this Court, in the case of Expression Buildtech
Private Limited v. Union of India , reported in 2022 SCC
OnLine Pat 3906 : (2022) 1 BLJ 400 (Pat) , to contend that where
a statutory settlement scheme is available, the competent authority
is required to consider the claim in accordance with the scheme
and pass an appropriate order.
29. Per contra, learned counsel appearing on behalf of
the respondents argued that the petitioner failed to deposit the
settlement amount in full, which was mandatory pre-condition for
grant of settlement under the Settlement Act. It is submitted that
the assessment order had determined the liability of the petitioner
and had allowed Entry Tax set-off only to the extent of Rs.
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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82,92,289/-. According to the respondents, the difference between
the Entry Tax claimed and the Entry Tax allowed represented an
amount payable by the petitioner.
30. It is admitted that one of the essential condition
prescribed in the statutory scheme was that an assessee opting for
settlement was required to make payment of total amount of
admitted tax payable by it. It is further submitted that upon
examination of the petitioner’s records and the particulars
furnished in the settlement application, if the prescribed authority
found that the tax admitted as payable by the petitioner for the tax
period in question, had not been paid in full, a deficiency memo
shall be issued to the petitioner requiring him to deposit the
settlement amount, which include the unpaid admitted tax payable
by the petitioner. Since the petitioner failed to deposit the
settlement amount within the prescribed period, the appropriate
authority was justified in rejecting the settlement application.
31. Learned Counsel further submits that the petitioner
has approached this Court after considerable lapse of time and in
the meanwhile, the Settlement Act has ceased to operate. It is,
therefore, contended that the settlement scheme has expired, no
relief could be granted to the petitioner under the said enactment.
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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On this ground also, it is submitted that the writ applications have
become infructuous.
32. Learned Counsel next submits that the petitioner is
engaged in the manufacturing of batteries outside the State of
Bihar and imported said batteries to the local areas within the State
of Bihar under the provisions of Bihar Tax on Entry of Goods into
Local Areas for Consumption, Use or Sale therein Act, 1993, the
petitioner was liable to pay entry tax on import of such batteries
into the local areas of the State of Bihar. The petitioner paid entry
tax in respect of the batteries brought into the State of Bihar,
however, according to the respondents, those batteries were
subsequently not sold in the ordinary course of business, but was
utilized for replacement of old/defective batteries free of cost to its
customers. Since there was no sale of such batteries, no VAT
liability arose in respect thereof.
33. Notwithstanding the above position, the petitioner
claims reduction of its VAT liability to the extent of entry tax paid
on batteries, which were subsequently utilized for replacement
purposes. Such claim was rightly disallowed by the assessing
authority since VAT arose upon sale of the goods and in absence of
any sale, the petitioner could not claim adjustment of the entry tax
against its VAT liability.
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34. The liability arising from the assessment order
continues to operate against the petitioner and that the petitioner
cannot seek to claim the amount which remain payable pursuant to
the assessment as having been discharged merely on the basis of
the figures disclosed in the original return. It is, accordingly,
contended that the prescribed authority was justified in asking the
petitioner to deposit the amount determined under the settlement
scheme and upon failure to do so, in rejecting the petitioner’s
settlement application.
35. I have heard learned Counsel for the parties
concerned and have gone through the materials available on
record, including the order under challenge, the return filed by the
petitioner, the assessment order and the relevant provisions of
Settlement Act and the Settlement Rules.
36. The petitioner invoked the provisions of Settlement
Act and submitted its application in Form-I on 19.07.2024 while
the Settlement Act was in force, which was duly acknowledged in
Form-II and the prescribed authority thereafter proceeded to
determine the amount payable under the settlement scheme.
37. An objection was raised by the petitioner on
computation done by the authority, specifically contending that the
tax admitted by it in the return had already been paid and further
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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liability arose on account of disallowance of the Entry Tax set-off.
The application for settlement was rejected on the ground that the
petitioner has failed to deposit the amount demanded by the
prescribed authority, as against the admitted tax.
38. The question, which arises for consideration before
me, is as to whether the amount demanded from the petitioner was
determined in accordance with the scheme of the Settlement Act or
not?
39. Section 2 (b) of the Settlement Act defines “admitted
tax” to mean the amount of tax admitted as being payable in the
returns filed by the party under the law. Section 2 (d) separately
defines “arrear tax, penalty, interest or fine in dispute” and
includes tax payable pursuant to an order of assessment,
reassessment or scrutiny or any other order passed under the law.
Section 2 (e) defines “dispute” with reference to proceedings
pending against such levy, while Section 2 (f) defines “disputed
amount” as the tax, interest, fine or penalty determined as payable
pursuant to an order of assessment, reassessment, scrutiny or any
other order passed under the law.
40. The Legislature has, thus, maintained a distinction
between the tax admitted in the return and the amount determined
pursuant to an assessment order. The former is founded upon the
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return filed by the assessee; whereas the latter is referable to the
determination made under the assessment proceedings. This
distinction assumes significance in the present case.
41. The petitioner had claimed the Entry Tax set-off in
its return. The assessing authority disallowed a part of the claim
and as a consequence thereof, raised an additional demand. The
additional demand was not an amount, which had been separately
admitted by the petitioner in its return. It arose upon the
determination made in the assessment order. The said
determination in the assessment order was pursued by the
petitioner under the statutory remedy before the appellate authority
and the Tribunal etc. The liability arising from the disallowance of
the Entry Tax set-off was, therefore, an amount arising pursuant to
the assessment order and falling for consideration under the
provisions relating to the disputed amount. Whether the Entry Tax
set-off was rightly or wrongly disallowed is not an issue which is
to be decided in the present proceeding.
42. Section 3 of the Settlement Act provides a
mechanism for settlement of dispute and prescribe settlement
amount to be 35 per cent of the arrears of tax in dispute or the
amount already paid towards such arrears, whichever is higher.
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The provision separately deals with disputes relating to penalty,
fine or interest, which is 10 per cent of the disputed amount.
43. The explanation appended to Section 3 (1) of the
Settlement Act provides that the expression “settlement amount”
shall not include any payment towards any arrear of admitted tax
and the party shall deposit the total amount of admitted tax. Thus,
the Settlement Act does not make the admitted tax a component of
the settlement amount. The settlement amount is calculated with
reference to the dispute, while the admitted tax is dealt with
separately.
44. Section 3 (2) of the Settlement Act further provides
that where the party has already deposited any amount in respect
of the dispute, such amount is to be treated as payment towards the
settlement amount and only the difference is required to be paid.
45. The scheme is, therefore, not one where the entire
liability reflected in the assessment order is simply required to be
deposited. The Settlement Act requires the amount forming the
subject matter of the dispute to be identified, the settlement
amount to be calculated in accordance with Section 3 of the
Settlement Act, and the amount already paid towards the dispute,
as contemplated under sub-sections (2) and (3) of Section 3 of the
Settlement Act.
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46. The rules framed under the Settlement Act, i.e.
Settlement Rules, also proceeds on the same basis inasmuch as
Rule 2 (2) of the Settlement Rules defines the words and
expressions used in the Settlement Rules, but the words or
expressions not defined in the Settlement Rules shall have the
meanings assigned to them in the Settlement Act or in the relevant
law. Thus, the expression “admitted tax”, having been defined in
Section 2 (b), of the Settlement Act, carries that meaning where
the Settlement Rules are applied.
47. Rule 3 of the Settlement Rules prescribes the manner
in which the application for settlement is to be made, Rule 4 deals
with disposal of the application. Under Rule 4 (2) of the
Settlement Rules, the prescribed authority is required to verify the
computation of the disputed amount, the payments made, the
settlement amount and the other particulars furnished in Form-I. If
the disputed amount or the settlement amount has not been
correctly computed or is not in accordance with the Act, or if a
payment claimed by the applicant is not borne out from the official
records or VATMIS, Rule 4 (5) permits the authority to issue
Form-IV.
48. Thus, it is clear that Form-IV deals with only the
disputed amount or the settlement amount and not the admitted
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tax. Form-IV, therefore, is not the source of the liability towards
admitted tax upon the petitioner.
49. What is required to be demanded through Form-IV is
the amount, which is payable after the disputed amount and the
settlement amount have been correctly determined in accordance
with the Settlement Act. Rule 4 (5) of the Settlement Rules itself
uses the expression “settlement amount as calculated in
accordance with the provisions of the Act”.
50. Where the application is found to be in order, Rule 4
(6) of the Settlement Rules contemplates Form-V, requiring
deposit of the settlement amount. Upon deposit of the entire
settlement amount, Rule 4 (7) of the Settlement Rules
contemplates an order in Form-VI settling the dispute. Rule 4 (8)
of the Settlement Rules provides for rejection where, inter alia , the
applicant fails to furnish evidence of payment of the balance
settlement amount demanded in Form-IV or fails to furnish
evidence of deposit of the entire settlement amount pursuant to
Form-V.
51. In the present case, the petitioner asserts amount
admitted as payable in the return is discharged and the additional
liability arose only because a part of the Entry Tax set-off claimed
in the return was disallowed in the assessment. The assessment
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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order alone could not furnish the basis for treating the amount
arising from disallowance of Entry Tax set-off as admitted tax,
whereas, on the other hand, the prescribed authority asserts that the
payable admitted tax amount has not been discharged. The
distinction becomes relevant because the Settlement Act separately
deals with admitted tax, arrears of tax in dispute and the arrears of
admitted tax.
52. The authority is required to examine the return and
the payment particulars for the purpose of determining the
admitted tax in terms of Section 2 (b) of the Settlement Act. The
settlement amount was required to be worked out in accordance
with Sections 2 (b), 2 (d), 2 (f), 3 (1) and Explanation (1) to
Section 3 of the Settlement Act. The respective provisions needs
strict interpretation for the purposes of present adjudication.
53. The preamble of the Settlement Act provides for
settlement of disputes arising from proceedings under Part I of the
Bihar Finance Act, 1981 (Bihar Act 5 of 1981) [as it stood before
its repeal by section 94 of the Bihar Value Added Tax Act, 2005
(Act 27 of 2005)], the Bihar Value Added Tax Act, 2005 (Act 27 of
2005), the Bihar Tax on Entry of goods into Local Areas for
Consumption, use or Sale Therein Act, 1993 (Bihar Act No 16 of
1993), the Bihar Taxation on Luxuries in Hotels Act, 1988 (Bihar
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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Act 5 of 1988), the Bihar Entertainment Tax Act, 1948 (Bihar Act
XXXV of 1948), the Bihar Tax on Advertisement Act,2007, [as
they stood before their repeal by section 173 of the Bihar Goods
and Services Tax Act, 2017(Bihar Act No. 12 of 2017)],the Bihar
Electricity Duty Act.1948 (Bihar Act 36 of 1948)[as it stood before
its repeal by section 23 of the Bihar Electricity Duty Act, 2018
(Act 4 of 2018)], the Bihar Electricity Duty Act.2018 (Bihar Act 4
of 2018) and the Central Sales Tax Act, 1956 (Act 74 of 1956) and
is in the nature of granting remission.
54. For present purposes of adjudication, the provisions
of Section 2(b) and Explanation to Section 3 (1) of the Settlement
Act are reproduced herein below:-
“ 2. (b) “admitted tax” means the amount
of tax admitted as being payable in the returns filed
by the party under the law;”
Explanation 1 to Section 3 (1) .- For the
purposes of this sub-section, the expression
“settlement amount” shall not include any payment
towards any arrear of admitted tax and the party
shall deposit the total amount of admitted tax.”
55. In the present case, CWJC No. 9321 of 2025, the
petitioner has admitted output tax of Rs. 1,16,74,142/- and for
availment of settlement scheme, the petitioner, as per strict
interpretation of explanation (1) to Section 3 (1) of the Settlement
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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Act, which is reproduced herein above, is required to make
payment of entire amount of admitted tax. As per the petitioner, it
has discharged the payment of admitted tax of Rs. 1,16,74,142/- by
way of adjustment of payment of Rs. 91,51,103/- made under
Entry Tax Act and remaining amount of Rs. 25,14,577/- under VAT
Act by cheque. The payment of Rs. 91,51,103/- by adjustment has
been reduced by the assessing authority to Rs. 82,92,289/-. In
effect, the arrears/short payment against payment of admitted tax
is Rs. 8,58,814/-.
55. On strict interpretation of Explanation to Section 3
(1) of the Settlement Act, I am of the considered view that the
petitioner is required to make payment of Rs. 8,58,814/- against
arrears/short payment of admitted tax for availment of settlement
scheme.
56. Accordingly, even though the tenure of settlement
Act is over, if the petitioner makes payment of arrears of admitted
tax within a period of two weeks from today, the respondent is
obliged to pass fresh order for settlement in furtherance of scope
and object of the Bihar Settlement of Taxation Disputes Act, 2024.
The aforesaid liberty is extended to the petitioner in proceeding of
CWJC No. 9517 of 2025, CWJC No. 9528 of 2025, CWJC No.
9436 of 2025 and CWJC No. 9503 of 2025,
Patna High Court CWJC No.9321 of 2025 dt. 06-11-2026
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57. These writ applications are disposed with the
aforesaid liberty.
(Anil Kumar Sinha, J.)
Vikash Kumar, J.:
I agree.
(Vikash Kumar, J.)
Prabhakar Anand/-
AFR/NAFR AFR
CAV DATE 11-08-2026
Uploading Date 06-11-2026
Transmission Date N/A