Authority: High Court of Judicature at Patna

Order Date: 06-11-2026

Case Overview

  • Petitioner: Amara Raja Batteries Ltd (now Amara Raja Energy and Mobility Ltd), represented by Commercial Co‑ordinator Mr. Debnath Mukherjee and senior counsel Mr. D. V. Pathy.
  • Respondents: The State of Bihar through the Commissioner of Commercial Taxes, Joint Commissioner and Assistant Commissioner of Commercial Taxes, Patliputra Circle.
  • Five civil writ applications (CWJC Nos. 9321, 9436, 9503, 9517, 9528 of 2025) were consolidated as they raised a common question of law and fact.
  • The petitioner sought quashing of the order dated 13‑03‑2025 that rejected its applications for settlement of tax disputes for the tax periods 2007‑08, 2013‑14, 2014‑15, 2015‑16 and 2017‑18 under the Bihar Settlement of Taxation Disputes Act, 2024 (the “Settlement Act”).
  • For each tax period the petitioner had filed VAT returns disclosing output tax and claimed Entry Tax set‑off. Example for 2007‑08: output tax Rs 1,16,74,142, Entry Tax set‑off claimed Rs 91,51,103, balance tax paid Rs 25,14,577.
  • Assessment order dated 24‑05‑2010 (Assistant Commissioner) fixed tax liability Rs 1,17,70,862 and allowed Entry Tax set‑off only Rs 82,92,289, creating an additional demand of Rs 9,66,167, of which Rs 8,58,814 related to the disallowed set‑off.
  • The petitioner appealed to the Joint Commissioner (admitted 05‑04‑2011), deposited Rs 3,38,104 during pendency, but the appeal was dismissed on 28‑11‑2012. A further appeal to the Commercial Taxes Tribunal was dismissed on 07‑02‑2025.
  • The Bihar Settlement of Taxation Disputes Act, 2024 was enacted on 14‑03‑2024, providing a statutory mechanism for settlement of pending tax disputes.
  • The petitioner filed a settlement application in Form‑I on 19‑07‑2024 for the 2007‑08 period; it was acknowledged in Form‑II on 29‑07‑2024.
  • Respondent No.2 issued a Form‑IV order on 31‑07‑2024, noting tax in dispute Rs 9,63,396 and determining settlement liability Rs 8,67,276 (including Rs 33,848 of assessed tax). The petitioner was directed to deposit Rs 5,67,276 (admitted tax) and Rs 33,849 (assessed tax) after credit of Rs 3,00,000.
  • The petitioner objected on 08‑08‑2024, 10‑09‑2024 and 24‑10‑2024, contending that only the amount disclosed in the return (Rs 1,16,74,142) should be treated as admitted tax and that the disallowed Entry Tax set‑off constitutes a disputed amount, not admitted tax.
  • Respondent No.2 rejected the objections on 27‑11‑2024, treating the remaining payable after allowed set‑off (Rs 33,81,853) as admitted tax and directing payment accordingly.
  • Similar facts and computations were presented for the other four writs, with respective output tax, claimed set‑off, allowed set‑off, and additional demands detailed in paragraphs 15‑18 of the judgment.
  • The petitioner argued that the authority’s approach violated the statutory scheme, specifically Section 2(b) of the Settlement Act defining “admitted tax” and the distinction between admitted tax and disputed tax under Sections 2(d), 2(f) and 3.
  • The respondents counter‑argued that the petitioner had not deposited the full settlement amount, a pre‑condition under the Act, and that the Settlement Act had expired, rendering the applications infructuous.
  • The Court examined the statutory definitions, the purpose of the Settlement Act, and the applicable Settlement Rules (Rule 4, Form‑IV, Form‑V, Form‑VI).

Final Outcome

  • The Court held that the amount arising from the disallowance of the Entry Tax set‑off is a disputed amount, not “admitted tax”.
  • Accordingly, the petitioner must pay the shortfall of admitted tax amounting to Rs 8,58,814 within two weeks from the date of the order.
  • Upon receipt of this payment, the respondents are obliged to pass a fresh settlement order in respect of the 2007‑08 tax period and, by extension, in the other four writs (tax periods 2013‑14, 2014‑15, 2015‑16, 2017‑18).
  • The Court granted liberty to the petitioner to make the payment despite the expiry of the Settlement Act, emphasizing that the statutory scheme permits such relief when the arrears of admitted tax are cleared.

Topics: Tax Settlement, Judicial Decision