The Patna High Court has clarified the proper procedural route for taxpayers aggrieved by GST-era service tax/central excise orders passed during the COVID-19 period. In this case, the petitioner—a consultancy firm—had approached the High Court under its writ jurisdiction, challenging an adjudication order dated 22 February 2021. While the writ remained pending with interim protection, counsel for the petitioner eventually sought to withdraw the writ petition so that a statutory appeal could be pursued before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Taking note of the Supreme Court’s pan-India extension of limitation during the pandemic, the Division Bench (Hon’ble the Chief Justice and Hon’ble Mr. Justice Rajiv Roy) permitted the petitioner to avail the appellate remedy, even though the order-in-original was of February 2021. The Court reasoned that the Supreme Court had extended all periods of limitation for filing appeals and applications, with the benefit running up to 90 days from 28 February 2022. Since the writ petition had been instituted on 29 January 2022—well within the extended window—the petitioner could not be non-suited on limitation for taking the statutory course of appeal.

At the same time, the Bench balanced equities. The matter had been pending before the High Court “for a considerable time,” and the petitioner had enjoyed an interim stay. To ensure fairness to the revenue authorities while still allowing the statutory appeal, the Court directed the petitioner to deposit half of the principal demand within one month. The Court further directed that the statutory appeal before the CESTAT be filed within one month from the date of such deposit. If either of these stipulations were not complied with, the department would be free to proceed in accordance with law. Finally, the Bench clarified that it had made no observation on the merits, leaving all contentions open to be considered by the Appellate Tribunal.

In essence, the High Court re-affirmed two settled themes. First, where an effective statutory appellate mechanism exists—here, the CESTAT—the High Court will ordinarily relegate the aggrieved person to that remedy, especially when the controversy involves questions best addressed by the specialised appellate forum. Second, the Court acknowledged the Supreme Court’s pandemic-related orders that extended limitation and ensured litigants would not be prejudiced by the extraordinary disruption of court functioning. Applying that framework, the petitioner was afforded a fair opportunity to pursue the statutory remedy without being shut out by technical limitation.

The order is significant for taxpayers who, during COVID-19, may have filed writ petitions to secure interim relief but later preferred to switch to the appellate route once conditions stabilised. The Patna High Court’s approach—permitting withdrawal with liberty to appeal, subject to a reasonable deposit—strikes a pragmatic balance: it preserves the discipline of statutory procedure while protecting both revenue interests and taxpayer rights. It also sends a clear signal that High Courts will not pronounce on the merits where an appellate forum is available and competent to adjudicate, and that COVID-19 limitation extensions will be applied in a manner that facilitates substantive justice rather than penalises litigants for pandemic-era delays.

For practitioners, two actionable takeaways emerge. First, when advising clients whose adjudication orders were passed between 2020–2022, it is prudent to examine the exact dates of orders and filings against the Supreme Court’s extension scheme. If the effective limitation period, as extended, still shelters the client, an appeal may be a more robust long-term strategy than persisting with writ proceedings. Second, when interim orders have operated for a long time, courts may insist on a deposit as a condition for transition to the appellate process—typically calibrated to the principal demand—so plan client cash flows accordingly.

For taxpayers, the message is straightforward: the High Court is not closing the doors; it is directing you to the right door—CESTAT—while ensuring that neither side is unfairly disadvantaged by the pandemic’s procedural fallout.

Significance or Implication of the Judgment (For general public or government)
This ruling underscores that litigants will not be denied appellate remedies due to COVID-19 disruptions. Individuals and businesses facing central excise, service tax, or GST-related demands from the pandemic period can still access statutory appeals if their filings fall within the Supreme Court’s extended timelines. At the same time, the judgment reassures government departments that prolonged interim protection obtained in writ proceedings will be balanced by reasonable deposit conditions when parties shift to the appellate route. The decision therefore promotes both procedural discipline and substantive fairness—encouraging resolution by specialised tribunals, reducing the writ docket, and ensuring that the revenue is not left remediless during transitions.

Legal Issue(s) Decided and the Court’s Decision with reasoning (Use bullet points)

• Whether the petitioner should pursue the statutory appellate remedy before CESTAT instead of continuing with the writ petition.
  Decision: Yes. The Court permitted withdrawal of the writ to enable the petitioner to file a statutory appeal.
  Reasoning: In fiscal matters involving adjudication orders, the existence of an effective statutory appeal (here, CESTAT) generally persuades High Courts to relegate parties to that remedy. The Tribunal is the appropriate forum to consider facts and law comprehensively.
• Whether pandemic-related extensions of limitation protect the petitioner’s right to appeal despite the original order being dated 22.02.2021.
  Decision: Yes. The Court noted the Supreme Court’s nationwide extension of limitation, with the benefit continuing up to 90 days from 28.02.2022. Since the writ was filed on 29.01.2022, the petitioner fell within the protective umbrella and could now take recourse to appeal.
  Reasoning: The Supreme Court’s orders on extension of limitation during COVID-19 were intended to ensure that litigants were not prejudiced by court and office disruptions. The High Court applied that framework to preserve the appellate remedy.
• What conditions should govern the transition from writ to appeal when interim protection has subsisted for a long time.
  Decision: The Court directed deposit of 50% of the principal demand within one month and required filing of the appeal within one month from the date of such deposit. Non-compliance would entitle the department to proceed according to law.
  Reasoning: This balances equities—protecting the revenue’s position given the long pendency and interim stay, while ensuring the petitioner’s right to pursue the statutory appeal without any comment on merits.

Judgments Relied Upon or Cited by Court

• In Re: Cognizance for Extension of Limitation, Suo Motu Writ (Civil) No. 3 of 2020 — Supreme Court’s series of orders extending limitation during COVID-19 (referenced in substance by the High Court as the basis for allowing the statutory appeal).

Case Title
M/S Sriwas Consultants Vs. The Union of India

Case Number
Civil Writ Jurisdiction Case No. 1623 of 2022.

Coram and Names of Judges
Hon’ble the Chief Justice (K. Vinod Chandran) and Hon’ble Mr. Justice Rajiv Roy.

Names of Advocates and who they appeared for

• For the petitioner: Mrs. Archana Shahi, Advocate; Mr. Alok Kumar, Advocate.
• For the Union of India/CGST & CX: Dr. K.N. Singh, ASG; Mr. Anshuman Singh; Mr. Shivaditya Dhari Sinha (JC to ASG).
• For the State Bank of India: Mr. Rakesh Kumar Singh, Advocate.
• For LIC Housing Finance Ltd.: Mr. Lakshman Lal Pandey, Advocate.

Link to Judgment
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