2022 (12) TMI 812 - HC - GST

Violation of principles of natural justice - Rejection of transitional credit - proper opportunity of hearing was not afforded - reply to show cause notice not given - HELD THAT - In the present case, order against the petitioner has been passed without submission of reply to show cause notice. There is dispute with regard to the service of notice through mail. According to the petitioner, the mail ID was of an employee, who was no longer in service whereas according to the respondents, the mail ID was one which was supplied by the petitioner to the department. Further, we have gone through the memo of appeal filed by the petitioner against the order of adjudication and we find that substantial grounds have been raised. In our opinion, those grounds ought to be considered in its proper perspective. The Hon ble Supreme Court in the case of UNION OF INDIA ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. ANR. 2022 (7) TMI 1232 - SC ORDER has issued general directions to the Goods and Service Tax Network (GSTN) to open common portal for filing concerned forms for availing transitional credit through TRAN-1 and TRAN-2 for two months which period expires on 30.11.2022. The orders dated 12.12.2019 and 04.03.2021 are set aside with the direction that respondents shall provide facility to the petitioner for filing form TRAN-1 within the above extended period and shall not refuse to accept the same if so filed - petition allowed.

Summary

Issues: Challenge to rejection of transitional ITC, lack of proper opportunity of hearing, consideration of grounds, service of notice via mail, submission of reply to show cause notice, directions by the Supreme Court regarding filing forms for availing transitional credit.

The judgment deals with a challenge to the rejection of transitional Input Tax Credit (ITC) by the Adjudicating Authority and the Appellate Authority. The petitioner contested that the orders were passed without affording a proper opportunity of hearing and without considering the substantial claims made. The petitioner relied on a Supreme Court case allowing re-submission of applications in similar cases. The respondents argued that the show cause notice was sent via mail to the address provided by the petitioner, and the claims were partly rejected after due examination. The court noted discrepancies in the service of notice via mail and observed that the substantial grounds raised by the petitioner should have been considered properly.

The Hon'ble Supreme Court had issued directions to the Goods and Service Tax Network (GSTN) regarding the opening of a common portal for filing forms for availing transitional credit within a specified period. In light of the above considerations, the court decided to set aside the previous orders and directed the respondents to facilitate the petitioner in filing form TRAN-1 within the extended period. The department was instructed not to refuse acceptance of the form if filed within the stipulated time. Upon submission of the application, the department was mandated to thoroughly assess all aspects, provide a fair hearing, and issue a fresh order in compliance with the law.

Consequently, the petition was allowed in favor of the petitioner as indicated above, and all pending applications were disposed of accordingly.