Bihar State Power (Holding) Company Limited v. Income Tax Officer, Ward-2(1), Patna & Anr.
Where a tax issue is already pending before the Tribunal, the writ court may preserve that forum’s merits jurisdiction while directing prompt consideration of interim relief and protecting against coercion meanwhile.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-09-26
Where a tax issue is already pending before the Tribunal, the writ court may preserve that forum’s merits jurisdiction while directing prompt consideration of interim relief and protecting against coercion meanwhile. Interim application to be decided within six weeks; coercive recovery restrained meanwhile
What happened
A ₹29,23,94,340 demand for AY 2012–13 remained under challenge while the company argued that tax proceedings continued in the name of the dissolved Bihar State Electricity Board. The Board’s assets and liabilities had been transferred under a 2012 electricity-sector restructuring scheme. The relevant issue was already before the Tribunal, and a rectification application dated 2 April 2025 was also pending. Recovery communications continued in the meantime.
Questions before the court
- Whether the High Court should decide the non-existent-entity objection while the Tribunal was seized of it.
- What interim protection was appropriate against recovery pending consideration of a stay request.
What each side argued
The company invoked Maruti Suzuki and sought rectification and protection from coercion. Revenue opposed parallel merits adjudication and said interim relief could be requested from the Tribunal or assessing officer. The company stated that a pending interim request had not been decided.
Why the court ruled this way
The High Court deliberately refrained from expressing a view on the validity of the orders or application of the non-existent-entity principle. Doing so could interfere with the Tribunal’s independent consideration. It instead addressed the practical risk that recovery would precede a decision on interim protection.
Controlling point
Where a tax issue is already pending before the Tribunal, the writ court may preserve that forum’s merits jurisdiction while directing prompt consideration of interim relief and protecting against coercion meanwhile.
Order and next steps
The assessing officer or Tribunal, as applicable, must decide the interim application within six weeks of receipt or production of the judgment. No coercive action in any form may be taken meanwhile. The writ was disposed of.
Practical implications
In restructuring cases, assemble the statutory transfer scheme, dissolution date and each notice’s addressee. Pursue the jurisdictional objection in the pending appeal and obtain an express decision on recovery protection rather than assuming that filing a rectification application suspends collection.
Limits of this ruling
- The court did not declare the tax orders void.
- The protection is tied to the directed interim decision, not an unconditional disposal of the demand.
Law and judgment source
- Income-tax Act 1961, section 154
- Constitution of India, Article 226
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Source checked: 2026-09-26 · Judgment paragraphs: Paragraphs 3–16 · Later case history: not verified. Verify subsequent orders before reliance.
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