1. Case Title

R.K. Transport & Constructions Ltd. vs The State of Jharkhand & Others
W.P. (T) No. 1624 of 2024
Pronounced on: 13 June 2025
Coram: Hon'ble The Chief Justice M.S. Ramachandra Rao and Hon’ble Mr. Justice Rajesh Shankar

2. Summary of Facts

The petitioner, R.K. Transport & Constructions Ltd., engaged in the business of coal transportation, had availed services of commercial vehicle rentals from M.B. Enterprises (6th respondent) during October 2020 to March 2021. GST amounting to ₹11,18,832.58 was included in the invoices raised by the 6th respondent, and the petitioner made full payment including the tax component. However, the 6th respondent failed to file GSTR-1 returns, resulting in the petitioner being unable to claim Input Tax Credit (ITC) worth ₹11,17,703.

Despite sending legal notices and representations to both the 6th respondent and the tax authorities (respondents 1–5), no action was taken. The petitioner previously approached the court in W.P. (T) No. 2665 of 2022 and was advised to submit fresh representations. When those too failed to trigger departmental action, the current writ petition was filed.

3. Key Issues

• Whether the State Tax authorities (respondents 1–5) are obligated to act under Section 76 of the Jharkhand GST Act against the 6th respondent for failing to deposit collected GST.
• Whether the petition is maintainable despite a previous writ petition on the same subject.
• Whether a person registered under the CGST Act is outside the jurisdiction of State authorities for enforcement of GST obligations under Section 76.

4. Legal Provisions of CGST act

Section 76. Tax collected but not paid to Government.-( Effective from 01.07.2017)

(1) Notwithstanding anything to the contrary contained in any order or direction of any Appellate Authority or Appellate Tribunal or court or in any other provisions of this Act or the rules made thereunder or any other law for the time being in force, every person who has collected from any other person any amount as representing the tax under this Act, and has not paid the said amount to the Government, shall forthwith pay the said amount to the Government, irrespective of whether the supplies in respect of which such amount was collected are taxable or not.

(2) Where any amount is required to be paid to the Government under sub-section (1), and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice requiring him to show cause as to why the said amount as specified in the notice, should not be paid by him to the Government and why a penalty equivalent to the amount specified in the notice should not be imposed on him under the provisions of this Act.

• The writ petition was allowed with costs of Rs.1,00,000 imposed on the 6th respondent, payable to the petitioner within eight weeks.
• Respondents 1–5 were directed to initiate proceedings under Section 76 of the Jharkhand GST Act, 2017 against the 6th respondent.
• This action must be completed within eight weeks from receipt of the order.

5. Reasoning behind the Decision

• The Court clarified that under Section 76(1) and (2) of the JGST Act, every person, irrespective of their registration under CGST or JGST, is liable to remit collected GST to the government.
• The defense that the 6th respondent was outside the jurisdiction of State authorities due to CGST registration was found untenable.
• The petitioner had provided ample documentary evidence to demonstrate payment of GST to the 6th respondent, thus suffering financial hardship due to denied ITC.
• The earlier writ petition did not involve a final adjudication on merits and hence did not bar the current petition under the principle of res judicata.
• The principle of res judicata, meaning "a matter already judged" in Latin, prevents a legal case from being litigated again if it has already been decided by a court. It ensures that once a final judgment is issued by a competent court, the same issue between the same parties cannot be re-litigated. This principle is rooted in the idea that there should be an end to litigation and that judicial decisions should be respected

6. Impact/Implications of the Decision

• This judgment reinforces the accountability of GST-registered suppliers to deposit tax collected from recipients, irrespective of the tax authority they are registered with.
• It mandates proactive enforcement responsibility on State authorities under Section 76 of the JGST Act, closing potential jurisdictional loopholes.
• The decision sets a precedent on the right of service recipients to seek judicial recourse and compel tax enforcement where inaction by departments results in ITC denial.
• It also demonstrates judicial intolerance for evasion tactics and affirms the legitimacy of writ remedies in addressing non-compliance under GST law.