An appellate order upholding an ex parte GST demand is valid despite ignoring key evidence and GST circulars on ITC

Facts of the Case

C.S. Construction, a business firm, is taking the tax department to court over a tax bill from the 2018-19 financial year. This all started when a tax official issued a penalty order against the firm without giving them a chance to explain their side of the story. The firm appealed this decision to a higher tax authority, but that appeal was rejected in February 2025.
The firm argues that this higher authority ignored important evidence and specific government rules that should have allowed them to claim certain tax credits. Now, the firm is asking the court to overturn these decisions, unfreeze their bank account, and stop the tax department from aggressively collecting the money while the legal case is still ongoing.

Issue of the case

Whether the tax authorities violated natural justice by issuing an order without a hearing and whether the appellate body failed to properly consider evidence and specific circulars regarding the firm’s tax credit claims.

Decision of the court

The Patna High Court closed the case by telling the petitioner that they can still challenge the previous order (from February 15, 2025) through the official legal appeal process outlined in Section 112 of the Bihar GST Act.