Patna High Court declines to interfere with GST demand where assessee gave undertaking and post‑dated cheques

Background of the dispute

The Patna High Court, in Umagaurav Private Limited Vs State of Bihar (Civil Writ Jurisdiction Case No. 4914 of 2026, judgment dated 17/07/2026), refused to exercise its writ jurisdiction under Article 226 in favour of the assessee and imposed costs of Rs. 25,000 for what it considered a non‑bona fide challenge to a GST demand.

The writ petition was filed by Umagaurav Private Limited, a company engaged in works contract and construction services, registered under the GST regime in Bihar under GSTIN 10AACCU2229A1Z8. The dispute related to the tax period April 2020 to March 2021 and arose from proceedings initiated under Section 73(1) and culminating in an order under Section 73(9) of the CGST/BGST Act, 2017.

The assessee approached the High Court seeking multiple reliefs, principally:

  • Quashing of:

    • An ex parte summary order dated 18.02.2025 and the Form GST DRC‑07 summary issued under Section 73(9) for FY 2020‑21, demanding:
      • Tax: Rs. 8,46,476/-
      • Interest: Rs. 5,71,372/-
      • Penalty: Rs. 84,646/-
    • The show cause notice (SCN) dated 25.10.2024 and its Form GST DRC‑01 summary dated 26.10.2024, raising proposed:
      • Tax: Rs. 8,46,476/-
      • Interest: Rs. 5,33,280/-
      • Penalty: NIL

  • Quashing of recovery proceedings under Section 79(1)(c) and Form GST DRC‑13, which had led to attachment and lien on its bank accounts.

  • Refund of any sums already recovered against the impugned demand.

  • Direction for fresh adjudication, if required, after proper notice and hearing.

The assessee’s primary grievance was that all notices and orders had been merely uploaded on the GST portal, allegedly only under the “Additional Notices and Orders” tab, without effective service through other modes, and that no real opportunity of hearing was provided, contrary to Section 75(4).

Factual matrix as pleaded by the assessee

Business profile and compliance claim

According to the assessee:

  • It is a private limited company incorporated under the Companies Act 2013, providing construction‑related works contract services in Bihar.
  • It claims to have:
    • Properly obtained GST registration,
    • Regularly filed returns for FY 2020‑21, and
    • Paid all self‑assessed tax.

The assessee maintains bank accounts with Axis Bank, Boring Road Branch, Patna (Account Nos. 922020058610511 and 20150206476).

Discovery of bank attachment and recovery action

The assessee stated that:

  1. On 16.12.2025, it found that debit operations from its Axis Bank accounts were blocked.
  2. Upon approaching the jurisdictional officer (respondent no. 2), it was informed that:
    • The bank accounts had been attached due to outstanding GST dues for FY 2019‑20 and 2020‑21.
    • A notice in Form GST DRC‑13 dated 26.11.2025 (Memo No. 222) under Section 79(1)(c) had been issued for recovery.
    • All relevant notices and orders were already available on the GST portal.

As per this DRC‑13, an aggregate recovery of Rs. 22,05,624 towards tax, interest and penalty for FY 2019‑20 and 2020‑21 was indicated.

Feeling compelled, and disputing the demand on merits, the assessee claimed it:

  • Signed three cheques with dates and amounts as directed by the department, and
  • Signed challans to enable immediate lifting of the bank attachment.

Consequently, respondent no. 3 issued Form GST DRC‑14 dated 17.12.2025, instructing unblocking of the bank accounts.

Subsequently, another Form GST DRC‑13 dated 16.03.2026 (Memo No. 417) was issued for holding Rs. 16,11,951/- towards alleged outstanding amounts for FY 2020‑21.

Challenge regarding service of notices and opportunity of hearing

The assessee contended:

  • The SCN dated 25.10.2024, DRC‑01 summary, reminder notices, and ex parte order dated 18.02.2025 (with DRC‑07 summary) were all placed only in the “Additional Notices and Orders” tab on the portal.
  • Unlike the main “Notices and Orders” tab, the “Additional Notices and Orders” tab allegedly:
    • Does not generate clear alerts, and
    • Is not ordinarily checked by assessees, making service ineffective.

The SCN required a reply by 25.11.2024, but the column for personal hearing was marked “N.A.”. The assessee argued that:

  • No date for oral hearing was ever fixed.
  • No opportunity for personal hearing was provided, in breach of Section 75(4).

It also asserted that:

  • No notices or orders were served by speed post, on the registered email ID, or by any other physical mode.
  • Merely hosting documents on the portal did not constitute valid “service” within the meaning of Section 169.

The core legal contentions were:

  1. Violation of natural justice and Section 75(4)
    • Absence of an effective opportunity of personal hearing before passing the order under Section 73(9).