Patna HC Refuses to Entertain Writ Petition After Voluntary GST Penalty Payment and Non-Utilisation of Appellate Remedy
Case Overview
Kishan Cement Stores Vs State of Bihar (Patna High Court)
The Patna High Court recently dismissed a writ petition filed by a registered dealer challenging penalty proceedings initiated under the CGST/BGST Act, 2017 in connection with the detention of goods during transit. The Court declined to interfere in the matter on the ground that the assessee had voluntarily paid the tax and penalty amount without raising any protest, that the proceedings had already concluded by operation of law under Section 129(5) of the CGST Act, 2017, and that the assessee had bypassed the statutory appellate mechanism available under Section 107 of the CGST/BGST Act, 2017 before approaching the High Court through a writ application.
Background and Facts of the Case
The assessee, a cement dealer, had goods detained during transportation. The detaining authority issued a Summary of Show Cause Notice for penalty in Form GST DRC-01 bearing Reference No. ZD1010250120531 dated 13.10.2025, along with a Show Cause Notice in Form GST MOV-07 dated 13.10.2025. Following the issuance of these notices, the person in charge of the conveyance came forward on the same date and deposited the full amount of tax and penalty as proposed by the authorities.
Thereafter, the competent authority — the Deputy Commissioner of State Tax, Jamui, Bihar — issued a Release Order in Form GST MOV-05 bearing Release Order No. ZD1010250120695 dated 13.10.2025 (Case ID: AD1010250022254), directing the release of goods and the conveyance bearing registration number JH15AC7947.
Nearly four months after the conclusion of these proceedings, the assessee approached the Patna High Court by way of a writ application seeking the following reliefs:
Quashing of the Summary of Show Cause Notice for penalty in Form GST DRC-01 (Reference No. ZD1010250120531 dated 13.10.2025) and the Show Cause Notice in Form GST MOV-07 (Process No. Nil, dated 13.10.2025), on the ground that they were issued in violation of
Section 129(4)of the CGST/BGST Act, 2017, without affording an opportunity of hearing, thereby contravening the principles of natural justice.Quashing of the aforesaid notices on the additional ground that the goods were accompanied by a valid tax-paid invoice and an E-way bill, which had expired during transportation owing to a technical breakdown of the vehicle, and that there was no intent to evade tax on the part of the assessee.
A direction to the respondents to refund the penalty amount of Rs. 2,00,090/- deposited under the CGST/BGST Act, 2017 along with interest, claiming that the payment was made under duress since the goods in transit were urgently required for business operations.
Any other appropriate relief as the Court may deem fit.
Contentions Raised by the Assessee
Violation of Natural Justice
The assessee contended that the Show Cause Notice in Form GST MOV-07 was issued without providing a prior opportunity of hearing as mandated under Section 129(4) of the CGST/BGST Act, 2017. The assessee argued that this procedural lapse rendered the entire proceedings of the detaining authority invalid and liable to be set aside.