Patna High Court
Indian Oil Corporation Ltd vs The State Of Biahr Through The ... on 11 February, 2025
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.2460 of 2021
======================================================
Indian Oil Corporation Ltd., a company incorporated under the Companies
Act, having its office at Lok Nayak Jaiprakash Bhawan, Dak Bunglow Road,
Patna through its Assistant Manager (F) Shri Manoj Mahto, (Male aged about
34 years), son of Shri R.P. Mahto, resident of G6, Grand Brij Bihari Enclave,
Near Kali Mandir, Mandiri, Patna-800001. .
... ... Petitioner
Versus
1. The State of Bihar through the Commissioner of State Tax, having its office
at Vikas Bhawan, Bailey Road, Patna.
2. Joint Commissioner of State Tax, Special Circle, Patna.
... ... Respondents
======================================================
Appearance :
For the Petitioner/s : Mr. S.D. Sanjay, Sr. Advocate
Mr. Mohit Agrawal, Advocate
Mr. Lokesh Kumar, Advocate
For the Respondent/s : Mr. Vikash Kumar, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
and
HONOURABLE MR. JUSTICE RAMESH CHAND MALVIYA
CAV JUDGMENT
(Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)
Date : 11-02-2025
The petitioner has prayed for the following reliefs:-
i) the order dated 21.02.2019 (as contained Annexure--
5) passed by respondent no. 2 for the period 1999 -
2000 under section 17(3) of the Bihar Finance Act,
1981 made available on 05.11.2020 be quashed.
ii) the notice of demand dated 21.02.2019 (as
contained in Annexure - 4) served on 21.10.2020
issued by the respondent no. 2 be quashed
iii) for granting any other relief (s) to which the
petitioner is otherwise found entitled to.
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
2/16
Brief Facts
2. Mr. S. D. Sanjay, learned Senior counsel for the
petitioner submits that the petitioner is a Public Sector
Undertaking of the Government of India. It is engaged in the
business of marketing of petroleum products. In the assessment for
the period 1999-2000 under Section 17(3) of the Bihar Finance
Act, 1981 (hereinafter referred to as the 'Act of 1981'), the
Commercial Taxes Officer, Special Circle, Patna (in short 'CTO')
determined the gross turnover of the petitioner at Rs.
54,63,46,08,715/- on estimate. The CTO also made several
disallowances in the assessment.
3. It is submitted that being aggrieved by the order of
assessment (Annexure '1' series to the writ application), the
petitioner preferred an appeal before the Joint Commissioner of
Commercial Taxes (Appeals), Central Division, Patna but the same
was dismissed vide order dated 02.09.2004 in Appeal Case No.
288/289 of 2003.
4. Thereafter, the petitioner preferred a revision
application before the learned Commercial Taxes Tribunal, Bihar,
Patna challenging the order of the appellate authority on various
grounds. In revision, the learned Tribunal held that the estimation
of gross turnover without any basis was not justified and the other
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
3/16
disallowances were also not justified. Thus, the learned Tribunal
set aside the order of the appellate authority and issued a direction
to the assessing authority to pass an order of assessment de novo.
In its order dated 25.08.2017 (Annexure '3' to the writ
application), the learned Tribunal specifically directed the
assessing authority to grant an opportunity of hearing to the
petitioner. The said order of the Tribunal was communicated to the
Deputy Commissioner, Commercial Taxes, Special Circle, Patna
through Memo No. 506 dated 30.08.2017.
5. The grievance of the petitioner is that the assessing
authority did not issue any notice to the petitioner in compliance of
the order of the Tribunal. No opportunity for production of
requisite books and other documents for completion of fresh
assessment proceedings was provided to the petitioner. Since there
was no notice to the petitioner and the period of limitation, which
is two years in terms of proviso to Section 24 of the Act of 1981,
elapsed, the petitioner company filed an application for refund.
After receipt of the application of the petitioner-company seeking
refund, the respondent no. 2 sent an email on 21.10.2020 by which
a demand notice in pursuance to an order purported to have been
passed on 21.02.2019 was served upon the petitioner-company. It
is submitted that only the demand notice was sent by mail on
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
4/16
21.10.2020, but the order of assessment was not communicated in
the said mail. A copy of the notice of demand dated 21.02.2019
issued by respondent no. 2 along with email served on 21.10.2020
has been annexed and marked as Annexure '4' series to the writ
application.
6. It is submitted that after receipt of the notice of
demand, the petitioner filed an application on 02.11.2020 for
obtaining the certified copy of the order of assessment said to have
been passed pursuant to the revisional order, the certified copy was
made available to the petitioner on 05.11.2020.
Submissions on behalf of the petitioner
7. Learned Senior counsel for the petitioner has
vehemently submitted before this Court that the order of
assessment passed by respondent no. 2, which is under challenge,
is an antedated order which has been passed in haste by the
respondent authority (Respondent No. 2) only after receipt of the
refund application from the petitioner-company. In this connection,
it is submitted that the entire ordersheet of the assessment
proceeding is running in '64' pages. On perusal of the last five
dates, it may be seen that the ordersheets have been drawn on
12.08.2005, 17.12.2019, 18.01.2019, 21.02.2019, and 31.10.2020.
Submission is that if for the first time after the revisional order was
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
5/16
passed by the Tribunal, the order was drawn on 17.12.2019, there
could not have been a date fixed on 18.01.2019 and 21.02.2019.
This is a case of antedating. It is submitted that in the right hand
side of the ordersheet, there is a mention of Memo 3935 dated
17.12.2019, on this date, in particular, there is an interpolation and
overwriting. It is his submission that the ordersheet clearly shows
that the order of assessment passed by respondent no. 2 is
antedated and the same is barred by law of limitation as per
proviso to Section 24 of the Act of 1981.
8. Learned Senior counsel submits that the impugned
order of assessment and the demand notice have been passed in
complete violation of the revisional order of the Tribunal, no
opportunity of hearing has been given to the petitioner hence, the
impugned order and the demand notice suffer from the vice of
violation of principles of natural justice and fair play in action. It is
his submission that this Court may hold and declare that the order
impugned which is Annexure '5' to the writ application is no order
in the eye of law, it is a nullity and the assessment proceeding
itself lapsed on expiry of a period of two years from 30.08.2017
which is the date of communication of the revisional order to the
assessing authority.
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
6/16
Stand of the Respondents
9. Mr. Vikas Kumar, learned Standing Counsel-11 has
opposed the contentions advanced on behalf of petitioner-
company. He has also produced the original file pertaining to the
assessment proceedings.
10. It is found that in paragraph '5' of the counter
affidavit, the answering respondent no. 2 has seriously disputed
the fact of non-issuance/service of notice to the petitioner. He has
brought on record a copy of the notice issued to the petitioner vide
Process No. 3935 dated 17.12.2018 for appearance on 18.01.2019.
It is submitted that on perusal of the issue register, it would appear
that the notice for hearing vide Process No. 3935 dated 17.12.2018
finds mention in it with date of appearance on 18.01.2019. Xerox
copy of the relevant extract of the issue register has been enclosed
as Annexure 'B' to the counter affidavit.
11. It is submitted that the notice vide Process No. 3935
was received by the petitioner on 19.12.2018 which is also evident
from the report of the process server at the back of the notice and
as such, there is valid service of notice upon the petitioner. Relying
upon Rule 50 of the Bihar Value Added Tax Rules, 2005 (as
existed at the relevant time), it is submitted that if once a notice
has been served validly under the provision of Rule 50, no further
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
7/16
notice shall be required to be served afresh during course of the
proceeding and it shall be the duty of the person upon whom
notice has been served to inquire about the order passed or fresh
dates fixed, as the case may be, in this regard. Learned counsel
submits that since there was no representation on behalf of the
petitioner, the assessment order was required to be passed within
the period of limitation as per provision of Section 37 of the Bihar
VAT Act, 2005, therefore, a decision was taken to pass an ex parte
order fixing date as 21.02.2019 and on the appointed date, detailed
order was passed.
12. The respondent no. 2 has submitted that the
contention of the petitioner with respect to interpolation with the
ordersheet is not correct.
13. Learned Standing counsel has relied upon a
judgment of the Hon'ble Supreme Court in the case of State of
Maharashtra and Others vs. Greatship (India) Limited (Civil
Appeal No. 4956 of 2022) wherein the Hon'ble Supreme Court
has been pleased to take a view that in a writ petition against order
of assessment by-passing the statutory remedy of appeal, if there
are serious disputes on facts as to whether the assessment order
was passed on 20.03.2020 or 14.07.2020, the High Court should
refrain from exercising its jurisdiction under the constitutional
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
8/16
provisions. The question is not of maintainability but is of
entertainability.
Reply on behalf of the petitioner
14. Mr. S.D. Sanjay, learned Senior counsel has, in
response submitted that between 12.08.2005 and 17.12.2019, there
is no noting in the ordersheet. On 17.12.2019, there is a reference
to the order passed by the Tribunal on 30.08.2017 but there is no
noting in the ordersheet to show receipt of the order passed by
Commercial Taxes Tribunal by the answering respondent. If the
order was received on 30.08.2017, why the ordersheet does not
record receipt of the order passed by the Tribunal and respondent
no. 2 proceeded to issue notice only on 17.12.2019. Learned
Senior counsel has relied upon a judgment of the Hon'ble Supreme
Court in the case of State of Andhra Pradesh vs. M.
Ramakishtaiah & Co. reported in (1994) 93 STC 406 to submit
that in the said case, the order of the Deputy Commissioner was
said to have been made on January 6, 1973 but it was served upon
the assessee on November 21, 1973 i.e. precisely ten and half
months later. There was no explanation from the Deputy
Commissioner why it was so delayed. Therefore, the Hon'ble
Supreme Court held that it must be presumed that the order was
not made on the date it purports to have been made.
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
9/16
Consideration
15. We have heard learned counsel for the parties and
perused the records. It is evident from the records that the
revisional order of the learned Tribunal was communicated to the
CTO vide Memo No. 506 dated 30.08.2017. At the top of the copy
of the revisional order which is available in the records, there is an
endorsement presumably of the CTO in the following words "izHkkjh
fyfid@lquokbZ gsrw lwpuk fuxZr djsa". This endorsement has been made
on 04.09.2017. It is available at page no. '74' of the record.
The operative part of the revisional order reads as under:-
"mi;qZDr ifjis{; esa iqujh{k.kdÙkkZ ds fo}ku
vf/koDrk dk ;g fuosnu fd bl ekeys dks ldy
vkoÙkZ ds fu/kkZj.k ,oa oÙkZeku esa miyC/k izi=ksa ds
vk/kkj ij fj;k;rh dj ds nkos ds fcUnq ij fopkj gsrq
izR;kofrZr fd;k tk;s rFkk os dj&fu/kkZj.k inkf/kdkjh
ds le{k lHkh visf{kr ys[kk iqLrksa ,oa vU; dkxtkrksa
dks izLrqr djus ds fy, rS;kj gS] U;k;kfgr esa
fopkj.kh; gSA
vr% ;g iqujh{k.k ;kfpdk Lohd`r djrs gq,
ekeyk iqudZjfu/kkZj.k gsrq dj&fu/kkZj.k inkf/kdkjh dks
izfriszf'kr fd;k tkrk gSA lkFk gh nkos ds leFkZu ij
izLrqr izi=ksa dh lE;d tk¡pksaijkUr fof/kd fu.kZ; fy;k
tk;sA dj&fu/kkZj.k inkf/kdkjh iqujh{k.kdÙkkZ dks ,d
volj nsrs gq, U;k;laxr vkns"k ikfjr djsaxsA bl dk;Z
esa iqujh{k.kdÙkkZ visf{kr ys[kk iqLrksa ,oa vU; lk{;ksa dks
dj&fu/kkZj.k inkf/kdkjh ds le{k izLrqr djsaxsA "
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
10/16
16. It further appears from the revisional order that it
was communicated to the petitioner-company also by the same
memo. It, however, appears from the ordersheet side of the records
that no order was drawn on 04.09.2017. Laches on the part of the
office of respondent no. 2 writ large on the face of the records. In
fact, the first order date mentioned in the record after receipt of the
revisional order is "17.12.2019" fixing the date of hearing on
"18.01.2019". In the right hand side margin portion, there is an
endorsement showing "3935/17.12.2019". There are overwritings
at two places, firstly in the date fixed for hearing and secondly in
the year of the Process No. 3935. Copy of the Memo No. 3935 is
available on the record and perusal thereof shows that it bears a
date of "17.12.2018". If the date of "17.12.2018" is taken as the
correct date, it is evident that in the ordersheet, the date has been
wrongly mentioned as "17.12.2019" instead of "17.12.2018".
17. It has been contended on behalf of the petitioner-
company that Process No. 3935 dated 17.12.2018 was never
served upon the petitioner-company but in the left hand side
portion, there is an endorsement saying that someone has received
the notice on 19.12.2018. There is no seal of the petitioner-
company and it is not clear as to who has received the notice on
behalf of the petitioner-company. There is a completely vague
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
11/16
initial of someone who is not identified. On the backside, there is
an endorsement of service of notice and one name "Munna" is
written but who is this Munna is not known and there is no
endorsement by the process server that to whom he met and served
the notice.
18. In these circumstances, a question has arisen before
this Court as to whether this Court should declare that the notice
vide Process No. 3935 is antedated. In the opinion of this Court
before declaring that it is an antedated notice, the parties would be
required to adduce their respective evidences. It will be a question
of fact which may be decided only on the basis of the evidences
after giving opportunity of hearing to both the parties to adduce
their respective evidences. As a constitutional Court, this Court
shall exercise self-restraint in venturing into this issue on the basis
of its own assumption of facts. This Court would, therefore,
proceed to consider other issues treating the notice issued on
17.12.2018.
19
. This Court would, however, record that there is no
proper service of notice upon the petitioner-company. The copy of
Process No. 3935 which is available on the record and said to have
been served upon the petitioner-company does not bear the seal of
the petitioner-company in acknowledgment of receipt of notice.
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
The process server has not endorsed on the backside of the notice
as to whom he met in the office of the petitioner-company and
served the notice. Thus, he has not even shown the identification
of the person in the office of the petitioner-company who received
the notice. In such circumstance, the order dated 18.01.2019, in
which the respondent no.2 has recorded that notice has been
served, does not inspire confidence of this Court. It appears from a
reading of the order dated 18.01.2019 that respondent no.2 was in
haste as he was afraid that this being an old matter, it is on the
verge of being time barred so he had no option but to pass an ex
parte order. He fixed the case for ex parte order on 21.02.2019 and
from the order dated 21.02.2019, it appears that the respondent
no.2 passed an ex parte order of reassessment which is impugned
in the present writ application. In the right hand margin portion,
there is a mention of Memo No.5170 dated 21.02.2019 giving an
impression that the ex parte order was communicated to the
petitioner-company vide Memo No.5170 dated 21.02.2019. This
has been seriously disputed by the learned Senior counsel for the
petitioner. In paragraph '19' of the writ application, the petitioner
has specifically stated that the demand notice was served upon the
petitioner vide email on 21.10.2020 after the petitioner submitted
its refund application for refund of excess tax paid during the
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
pendency of the appeal proceeding in respect of the order of
assessment for assessment year 1999-2000 purported to have been
passed on 21.02.2019 i.e. after a period of nearly twenty months of
the passing of the order of assessment without giving any
explanation for such abnormal delay in communicating the said
order and it leads to only one conclusion that the order of
assessment was not passed on the date it was purported to have
been passed and the same has been antedated to overcome the
limitation period. In response to paragraph '19' of the writ
application, respondent no.2 is completely silent in his counter
affidavit. There is no whisper in the counter affidavit that the ex
parte order dated 21.02.2019 was communicated to the petitioner-
company prior to issuance of demand notice. At the same time,
there is no explanation showing the reasons for not communicating
the reassessment order dated 21.02.2019 for a period of twenty
months from the date of the order. As recorded hereinabove, in the
right hand margin portion of the order dated 21.02.2019, an
impression has been given of issuance of one Memo No.5170
dated 21.02.2019 but on record it appears that the said memo
which is available at page '85' of the file has been made available
to the petitioner-company only on 21st October, 2020. It is this
document of the department which itself demonstrates that the
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
communication with regard to passing of the ex parte order of
reassessment and result thereof has been shown issued on
21.02.2019 but in fact served upon the petitioner-company on 21 st
October, 2020. This is in Form-XV. It has been sent to petitioner-
company on email also on 21.10.2020 only. In view of what is
evident from the records and there being complete silence on the
part of respondent no.2 in not explaining the reason for non-
communication of the order dated 21.02.2019, this Court finds that
what has been held by the Hon'ble Supreme Court in the case of
State of Andhra Pradesh vs. M. Ramakishtaiah & Co. (supra)
shall hold good for the petitioner-company as well. The relevant
extract of the order of the Hon'ble Supreme Court are being
quoted hereunder for a ready reference:-
"In the circumstances, the assessee raised a contention that
the order was in fact made after the expiry of four years but
was ante-dated, and therefore, it is bad. The High Court
accepted this submission but on a different reasoning. The
High Court was of the opinion that every order must be
communicated within a reasonable period and since the
order of the Deputy Commissioner in this case was not so
communicated, the High Court declared that the respondent-
assessee shall not be bound by it. This was done by the High
Court following its decision in T.R.C. No. 1 of 1976
pronounced on the same day [against which judgment Civil
Appeal No. 1014 of 1977 (in this batch) has been filed].
We are of the opinion that the theory evolved by the High
Court may not be really called for in the circumstances of
the case. We are of the opinion that this appeal has to be
dismissed on the ground urged by the assessee himself. As
stated above, the order of the Deputy Commissioner is said
to have been made on January 6, 1973, but it was served
upon the assessee on November 21, 1973, i.e., precisely 10
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
1/2 months later. There is no explanation from the Deputy
Commissioner why it was so delayed. If there had been a
proper explanation, it would have been a different matter.
But, in the absence of any explanation whatsoever, we must
presume that the order was not made on the date it purports
to have been made. It could have been made after the expiry
of the prescribed four years' period. The civil appeal is
accordingly dismissed. No costs.
Civil Appeal No. 1014 of 1977:
Though the dates are different in this case, the facts are
substantially similar. Indeed, the delay in communication in
this case is more than one year and five months. For the
reasons given in Civil Appeal No. 491 of 1977, this appeal
too is dismissed. No costs.
Appeals dismissed."
20. At this stage, we would reproduce Section 24 of the
Act of 1981 as under:-
"24. Period of limitation for completion of assessment
proceedings. - Except a proceeding under sub-section (5) of
section 17, section 18 and sub-section (1) of section 19 no
proceedings for assessment of the tax payable by a dealer
under this part in respect of any period shall be initiated and
completed except before the expiry of four years from the
expiry of such period :
Provided that a proceeding for re-assessment in pursuance
of or as a result of an order on appeal, revision and
reference or review shall be initiated and completed before
the expiry of two years from the date of communication of
such order to the assessing authority."
21. We are of the opinion that in the present case, the ex
parte order of reassessment (Annexure '5') passed by respondent
no.2 is antedated and it was not made within the period of limitation
as provided under proviso to Section 24 of the Act of 1981. It is bad
in law and is liable to be set aside. Accordingly, we set aside
Annexure '5' series to the writ application. The consequential
demand notice shall not operate.
Patna High Court CWJC No.2460 of 2021 dt.11-02-2025
22. This writ application is allowed.
23. At this stage, we must record that the office of
respondent no.2 remained sitting over the matter without any
action for an inordinate period of over two years and thereafter
indulged in passing of an antedated ex parte order which is liable
to be deprecated. In the circumstances, we impose a cost of Rs.1
lakh which the respondents would be liable to pay to the petitioner
within a period of one month from the date of receipt/production
of a copy of the order. The respondent no.1 shall institute an
appropriate inquiry into the matter and fix the responsibility for the
laches in the present proceeding and pass an appropriate order in
this regard within a period of three months from the date of
communication.
(Rajeev Ranjan Prasad, J)
(Ramesh Chand Malviya, J)
Rishi/-
AFR/NAFR
CAV DATE 10.02.2025
Uploading Date 11.02.2025
Transmission Date 11.02.2025
