The Patna High Court has ruled that if a taxpayer willingly agrees to certain terms to receive benefits from tax authorities regarding GST, they can’t later argue against those terms after enjoying the advantages they provide.
It quashed the writ petition of Umagaurav Private Limited and imposed costs of ₹25,000.
A division bench of Justice Rajeev Ranjan Prasad and Justice Kumar Manish stated that the applicant, who had the removal of restrictions on its bank account and allowed one of the post-dated cheques to be encashed as per the undertaking, could not subsequently claim that the undertaking was not true and obtained under Coercion.
The dispute arose after GST authorities attached the bank account of the applicant during proceedings. To get the removal of the attachment, the applicant provided an undertaking and filed three post-dated cheques. The bank account restrictions were afterwards lifted, allowing the applicant to operate the account.
The applicant before the HC said that the undertaking had been received under pressure because of the attachment of its bank account and therefore must not bind it. It contested the SCN and the consequential summary order passed under the GST law.
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The Court did not accept the appeal and observed that the applicant did not complain to the department immediately after executing the undertaking that it had been received under pressure. It considered the benefit of the removal of the bank account restriction and did not say anything for more than 3 months before approaching the court.
The bench said that nothing was there on record to show that the undertaking or the post-dated cheques had been provided under protest or compulsion.
“…the petitioner never represented to the department that the undertaking was wrongly given by him under duress; rather, he allowed one of the cheques to be cleared by the bank and took advantage of the removal of the withholdment of the account by the department”, the bench observed.
The Court observed that the writ petition was submitted merely after a considerable delay and did not find any explanation as to why the applicant had not contested either the undertaking or the GST proceedings immediately.
The court noted that, without any immediate protest or complaint indicating coercion, the claim that the undertaking was obtained under pressure was considered merely an afterthought.
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The High Court stated that writ jurisdiction is discretionary and is only available to litigants who approach the court with clean hands. As a result, it decided not to exercise its extraordinary jurisdiction.
The court dismissed the writ petition and imposed costs of ₹25,000, instructing that the amount be deposited with the Patna High Court Legal Services Committee within one month.
| Case Title | M/s Umagaurav Private Limited vs The State of Bihar |
| Case No. | W.P.(C) 5757/2025 & CM APPL. 26284/2025 |
| For Petitioner | Mr Anubhav Khowala, Advocate |
| For Respondent | Mr. Pratik Kumar, AC to GA-11 |
| Patna High Court | Read Order |
