The Patna High Court, in M/s Umagaurav Private Limited v. State of Bihar & Others, examined a challenge to GST proceedings initiated under Section 73 of the Bihar Goods and Services Tax Act, 2017. The petitioner sought quashing of the show cause notice, the ex parte demand order, the summary order in Form GST DRC-07 and consequential recovery proceedings, principally alleging ineffective service of notices, denial of personal hearing and violation of the principles of natural justice.
The Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Kumar Manish dismissed the writ petition by judgment dated 17 July 2026 in Civil Writ Jurisdiction Case No. 4914 of 2026. The Court also imposed costs of ₹25,000 upon the petitioner, payable to the Patna High Court Legal Services Committee.
Background of the Dispute
The petitioner was engaged in providing construction services as a works contractor and was registered under the GST law in Bihar. Proceedings were initiated for the financial year 2020–21 after discrepancies were noticed between the petitioner’s GST returns and the data available on the GST portal.
According to the show cause notice, the petitioner had disclosed tax liability of ₹16,54,984 in GSTR-1 but had paid ₹15,92,458 through GSTR-3B, resulting in an alleged short payment of ₹62,526. The department also alleged that ITC of ₹26,29,268 had been claimed in GSTR-3B, whereas ITC reflected in GSTR-2A was substantially lower. On this basis, proceedings were initiated for excess availment of input tax credit and suppression of turnover.
The adjudicating authority subsequently confirmed tax of ₹8,46,476, interest of ₹5,71,372 and penalty of ₹84,646, aggregating to ₹15,02,494 for the relevant period.
Petitioner’s Challenge
The petitioner contended that the show cause notice, reminders and adjudication order had been uploaded only under the “Additional Notices and Orders” tab of the GST portal. It was argued that such uploading did not constitute effective communication and that no notice had been served through speed post, registered email or physical communication.
The petitioner also relied upon Section 75(4) of the GST law and submitted that no date of personal hearing had been fixed. The personal hearing column in the notice was stated to have been marked “NA”. The petitioner therefore argued that the ex parte demand had been created without granting an effective opportunity to respond.
It was further alleged that the petitioner became aware of the demand only when its bank accounts were subjected to recovery action under Section 79.
Department’s Stand
The State opposed the writ petition and submitted that the notice had been issued through the GST portal, followed by reminder notices. The department asserted that when a notice or order is uploaded on the portal, system-generated alerts are ordinarily sent through SMS and registered email.
The respondents also relied upon the petitioner’s subsequent conduct. After attachment of its bank accounts, the petitioner furnished an undertaking to clear the outstanding amount within three months and submitted three post-dated cheques aggregating to ₹21,97,654. One cheque was encashed, while the remaining cheques were dishonoured for insufficient funds.
According to the department, the petitioner obtained release of the hold on its bank accounts on the strength of the undertaking and post-dated cheques, but did not immediately challenge the proceedings or allege that the undertaking had been given under protest or coercion.
Findings of the Patna High Court
The High Court noted that the writ petition concentrated primarily on the alleged non-compliance with Section 169 and ineffective service of the notices. However, the petitioner had not made clear and specific statements addressing the merits of the alleged excess ITC claim.
The Court observed that the show cause notice and Form GST DRC-01 contained the factual basis and figures on which the proposed demand was founded. The petitioner had not categorically disclosed what amount of ITC was actually reflected or accrued in its GSTR-2A, nor had it specifically denied the discrepancies recorded in the notice.
The Court also found significance in the adjudication record stating that the final reminder had been sent to the registered email address. Despite this assertion, the petitioner had not made a categorical statement that no email had been received. The Court characterised the petitioner’s assertions regarding lack of service as general and unsupported by adequate factual material.
Conduct of the Petitioner and Discretionary Writ Jurisdiction
A decisive factor in the judgment was the petitioner’s conduct after the attachment of its bank accounts. The petitioner had executed an undertaking acknowledging the outstanding tax, interest and penalty and had committed to payment within three months. It also submitted post-dated cheques and secured removal of the restriction on its bank accounts.
The Court found no contemporaneous protest, representation or material showing that the undertaking or cheques had been furnished under coercion. One of the cheques had also been permitted to be encashed.
In these circumstances, the High Court held that the plea of protest or compulsion raised in the writ petition appeared to be an afterthought. The Court further observed that the petitioner had sufficient time after execution of the undertaking to either lodge a protest or pursue the statutory appellate remedy under Section 107 of the BGST Act.
Alternative Remedy and Absence of Bona Fides
During the hearing, the Court offered the petitioner an option to withdraw the writ petition and pursue the statutory appeal under Section 107. The petitioner chose to continue with the writ proceedings.
The High Court held that the extraordinary and discretionary jurisdiction under Article 226 was not liable to be exercised in favour of a litigant who had not approached the Court with complete candour. It concluded that the writ petition was not bona fide and that the petitioner’s conduct disentitled it from discretionary relief.
Decision
The Patna High Court dismissed the writ petition and declined to interfere with the show cause notice, the demand order, Form GST DRC-07 and the consequential recovery proceedings.
The Court imposed costs of ₹25,000, directing the petitioner to deposit the amount with the Patna High Court Legal Services Committee within one month and file the receipt before the Registry.
The judgment highlights that a challenge based on alleged non-service of GST portal notices must be supported by specific factual pleadings. It also demonstrates that subsequent conduct, including furnishing an undertaking, issuing post-dated cheques and accepting the benefit of release of bank accounts, may materially affect the exercise of discretionary writ jurisdiction.
Why Read This Judgment?
This decision is relevant for advocates, Chartered Accountants, Company Secretaries, GST practitioners, tax consultants, corporate tax teams and businesses dealing with electronic service of GST notices, excess ITC proceedings, bank account recovery and writ remedies. It emphasises the need to monitor all tabs of the GST portal, maintain registered email access, respond promptly to notices and pursue statutory remedies within limitation. It also illustrates how the conduct of a taxpayer after initiation of recovery may influence the High Court’s decision to grant or refuse writ relief.
