Patna High Court
Konkan Railway Corporation Ltd vs The State Of Bihar And Ors on 24 January, 2024
Author: P. B. Bajanthri
Bench: P. B. Bajanthri
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.16290 of 2014
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Konkan Railway Corporation Ltd. through its General Manager (Accounts)
having Corporate Office at Belapur Bhawan, Section-11, CBD Belapur,
Navipur, Mumbai-400614.
... ... Petitioner/s
Versus
1. State of Bihar through Secretary cum Commissioner Commercial Taxes
Department, Government of Bihar, Patna.
2. Secretary cum Commissioner Commercial Taxes Department, Government
of Bihar, Patna.
3. Deputy Commissioner Commercial Taxes, Kishanganj Circle, Kishanganj.
4. Assistant Commissioner Commercial Taxes, Kishanganj Circle, Kishanganj.
5. Commercial Taxes Officer, Kishanganj Circle, Kishanganj.
6. State Bank of Mysore, Belapur Branch through its Branch Manager situated
at Belapur Bhawan, Sector-11, Office No. 03, CBD Belapur, Navi Mumbai-
400614.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Atul Chitale, Sr. Advocate
Mr. Siddhartha Prasad, Advocate
Mr. Sunit Kumar, Advocate
Ms. Shrish Raman, Advocate
Mr. Swekant Sinha, Advocate
For the Respondent/s : Mr. Vikash Kumar, SC 11
Mr. Ram Krishna, Advocate
For the SBI : Mr. Rakesh Kumar Singh, Advocate
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CORAM: HONOURABLE MR. JUSTICE P. B. BAJANTHRI
and
HONOURABLE MR. JUSTICE RAMESH CHAND
MALVIYA
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI)
Date : 24-01-2024
In the instant petition petitioner has prayed for the
following reliefs:-
"a) For issuance of appropriate writ(s)/
order(s)/ direction(s) for commanding the
respondent Commercial Taxes Department to
produce the exparte order dated 25.06.2010 passed
by the Commercial Taxes Officer, Kishanganj
Circle, Kishanganj in purported exercise of powers
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
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under the provisions of Bihar Finance Act, 1981
and Bihar Value Added Tax, 2005 whereby and
whereunder illegal tax liability including penalty to
the tune of Rs. 19,71,68,458.60/- (Nineteen Crores
Seventy One Lacs Sixty Eight Thousand Four
Hundred and Fifty Eight Rupees and Sixty Paisa)
has been imposed on the petitioner for the period
2004-2005 to 2008-2009 and upon its production
the Hon'ble Court may issue writ in the nature of
Certiorari for quashing the same.
b) For issuance of appropriate writ(s)/
order(s)/ direction(s) for quashing the reminder
demand notice dated 08.08.2014 issued by the office
of Deputy Commissioner Commercial Taxes,
Kishanganj Circle, Kishanganj for payment of
illegal tax liability including penalty to the tune of
Rs. 19,71,68,458.60/- (Nineteen Crores Seventy One
Lacs Sixty Eight Thousand Four Hundred and Fifty
Eight Rupees and Sixty Paisa).
c) For issuance of appropriate writ(s)/
order(s)/ direction(s) for quashing the Notice of
Demand under Section 47 of the Bihar Value Added
Tax Act, 2005 dated 26.08.2014 issued by the office
of Deputy Commissioner Commercial Taxes,
Kishanganj Circle, Kishanganj to the Bank of the
petitioner i.e. petitioner no. 6 for realization of
illegal tax liability including penalty to the tune of
Rs. 19,71,68,458.60/- (Nineteen Crores Seventy one
Lacs Sixty Eight Thousand Four Hundred and Fifty
Eight Rupees and Sixty Paisa).
d) To restrain the respondent from
realizing the illegal tax liability including penalty to
the tune of Rs. 19,71,68,458.60/- (Nineteen Crores
Seventy One Lacs Sixty Eight Thousand Four
Hundred and Fifty Eight Rupees and Sixty Paisa)
which has been imposed by Commercial Taxes
Department, Government of Bihar arbitrarily
actuated with malafide as the said authority
embarked upon the wrong notion of law and facts.
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
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e) And/or any other relief/reliefs for
which the petitioner is entitled to in the facts and
circumstances of the instant case."
2. The petitioner has entered into memorandum of
understanding with Chief Engineer (Construction) Jharkhand, East
Central Railway, Mahendrughat, Patna in so far as execution of
work contracts during the period from 2004-2005, 2005-2006 and
2006-2007. Arising out of work contract tax liability on petitioner
was with reference to State of Jharkhand or State of Bihar is the
issue involved in the present lis. From perusal of the records
Annexure-5/C series furnished by the petitioner along with
supplementary affidavit dated 07.01.2022 reveals that certain tax
payments have been made in the Tax Department of State of
Jharkhand.
3. The Office of the Accountant General, State of Bihar
raised certain Audit objections to the extent that petitioner was
liable to pay escaped turn over tax for the period from 2004 to
2007 and further for non-filing of return for the period from 2005
to 2009. Such Audit objection was taken note of by the Tax
Department of the State of Bihar and proceeded to issue notice to
the petitioner on 02.06.2010 i.e., by the Commercial Tax Officer,
Kishanganj Circle, Kishanganj, State of Bihar. Such a notice was
issued at three places of the petitioner namely, Katihar, Kishanganj
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and Navi Mumbai. For want of correct address, Katihar and
Kishanganj were not served. On the other hand, notice addressed
to Navi Mumbai was served belatedly to the petitioner on
06.07.2010
, whereas the date of appearance pursuant to the notice
dated 02.06.2010 was 15.06.2010 (within two weeks). Since notice
dated 02.06.2010 was made known to the petitioner on 06.07.2010
and in the meanwhile, the Tax Department have proceeded to pass
orders in respect of calculating escaped turn over tax and non-
filing of return for the period from 2004 to 2007 and 2005 to 2009
respectively. Thereafter, an amount of Rs. 19,71,68,458.60/-
(Nineteen Crores Seventy One Lakh Sixty Eight Thousand Four
Hundred and Fifty Eight rupees and Sixty Paisa) was ordered to be
determined and directed the petitioner to make payment. Feeling
aggrieved by the order dated 25.06.2010 in so far as calculation
and determination of amount of Rs. 19,71,68,458.60/-, petitioner
has presented this petition and obtained interim order and even to
this day, interim order is operative. Initially, they had approached
the Bombay High Court and obtained an interim order. Bombay
High Court noticed that Bombay High Court has no territorial
jurisdiction. In the result, they have invoke remedy before this
Court. They have the benefit of interim order before the Bombay
High Court and it is being continued in the present lis.
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
4. From perusal of the order dated 25.06.2010 series, it
is evident that it is an ex parte order. In all fairness, respondents
should have waited for returned of notice issued to Navi Mumbai
address or in the alternative they should have made a
communication through e-mail or issuing one more notice for the
reasons that huge amount of Rs. 19,71,68,458.60/- is alleged to
have been involved in the matter. Therefore, issuance of notice for
a period of 15 days was not reasonable and sufficient. Further, it is
required to be noted that the alleged allegation are relates to the
year 2004-2005 and up to 2008-2009. Therefore one more notice
was warranted, since there was no hurry. The petitioner was
required to collect necessary material information so as to appraise
or make necessary reply to the show cause notice dated
02.06.2010. Therefore, we have come to the conclusion that
sufficient notice- time period has not been provided to the
petitioner.
5. Learned counsel for the petitioner submitted that State
of Bihar Tax Department has no territorial jurisdiction in respect of
work contract executed under the territorial jurisdiction of State of
Jharkhand. In fact, he has pointed out certain documents along
with the 2nd supplementary affidavit to the extent that certain tax
payments have been made in the Tax Department, State of
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
Jharkhand. These are all the relevant documents for the purpose of
determining the escaped turn over tax and non-filing of return for
the aforementioned period. Further, if the petitioner fails to furnish
material with reference to notice dated 02.06.2010, in that event,
the State Tax Department of Bihar should have issued a notice to
the Chief Administrative Officer (Construction), East Central
Railway, Mahendrughat, Patna who had transacted with the
petitioner with reference to work service contract under the
territorial jurisdiction of State of Jharkhand. On the other hand,
State Tax Department, Bihar proceeded to determine and calculate
whatever the Accountant General Audit objection. Even perusal of
Accountant General Audit objection, it is not crystal clear as to
whether State of Bihar is liable to collect escaped turn over tax and
non-filing of return tax in respect of transaction of work contract
in the State of Jharkhand territorial Jurisdiction. Merely Office of
the East Central Railway is situated in Mahendrughat, Patna that
does not amount to the petitioner, was liable to pay tax in the State
of Bihar or not. Without examining who is the competent authority
to collect escaped turn over tax and non-filing of return etc. The
Official respondents are also hereby directed to examine whether
petitioner who is being registered dealer at Kishanganj Circle with
reference to dated 08.07.2004, has he filed returned for the
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
respective period or not. If he has not filed return, what are the
action taken at the relevant point of time so as to ask him to file
return on yearly basis. These issues have not been taken note of by
the Commercial Tax Officer, Kishanganj Circle, Kishanganj.
6. On these counts, the petitioner have made out a case
so as to interfere with the impugned order dated 25.06.2010 series
and they are set aside. It is noticed that petitioner had the benefit of
interim relief in respect of demand of Rs. 19,71,68,458.60/- is
concerned, therefore, the benefit of interim order would continue
in favour of the petitioner till the matter is decided afresh by the
competent authority in respect of whether petitioner is liable to pay
escaped turn over tax for the period from 2004 to 2007 and non-
filing of return for the period from 2005 to 2009 or not? In this
regard, a detailed show cause notice shall be issued to the
petitioner and on receipt of such show cause notice the petitioner
is hereby directed to furnish reply statement along with relevant
documents. Thereafter, a date of oral hearing shall be fixed. If any
assistance of Chief Administrative Officer (Construction) East
Central Railway, Mahendrughat, Patna is warranted, in that event,
notice shall be issued to Chief Administrative Officer for
appearance of oral hearing along with the relevant documents.
The petitioner is representative shall present and make submission
Patna High Court CWJC No.16290 of 2014 dt.24-01-2024
and further if any documents other than reply to the show cause
notice to be issued by the respondents to be submitted by the
petitioner. The competent authority is hereby directed to take note
of each and every contention and document to be placed by the
petitioner against the show cause notice and at the time of oral
hearing. Further if any document is placed or oral submission
made on behalf of the Chief Administrative Officer (Construction),
East Central Railway, Mahendrughat, Patna may also be taken
note of and proceed to pass a detailed speaking order even on the
issue of competent authority read with territorial jurisdiction and
communicate the same to the petitioner. The above exercise shall
be completed within a period of four months from today, till the
final order is passed, the respondents State of Bihar Department
are hereby directed not to precipitate the subject matter.
7. Accordingly, writ petition stands allowed in part.
(P. B. Bajanthri, J)
(Ramesh Chand Malviya, J)
Anand Kr.
AFR/NAFR
CAV DATE
Uploading Date 31.01.2024
Transmission Date
