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2024 (8) TMI 892 - HC - GSTChallenge to SCN issued u/s 73 of the Central Goods and Services Tax Act, 2017 - recovery of Input Tax Credit (ITC) which the petitioner had allegedly obtained wrongfully refund under Section 54(3)(ii) of the said Act - HELD THAT - Taking note of the fact that in an identical set of facts questioning legality of the show cause, the previous writ petition in M/S. INDORAMA INDIA PVT. LTD. VERSUS UNION OF INDIA ORS. 2024 (3) TMI 1343 - CALCUTTA HIGH COURT and M/S. INDORAMA INDIA PRIVATE LIMITED VERSUS UNION OF INDIA ORS. 2024 (4) TMI 1166 - CALCUTTA HIGH COURT had been admitted and since, the petitioner raises jurisdictional issue as regards competence of the proper officer to determine the amount of ITC wrongly refunded by proceeding under Section 73 of the said Act, it is opined that the writ petition should be heard. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date. Reply thereto, if any, be filed within three weeks thereafter - Liberty to mention upon expiry of the period for exchange of affidavits.
Issues:
Challenge to show cause notice under Section 73 of Central Goods and Services Tax Act, 2017 for wrongful refund of Input Tax Credit (ITC); Jurisdiction and authority of proper officer in determining and recovering ITC; Prima facie case for restraining respondents from proceeding with show cause; Prematurity of writ petition; Competence of proper officer under Section 73. Analysis: The petitioner contested a show cause notice issued under Section 73 of the Central Goods and Services Tax Act, 2017, challenging the jurisdiction and authority of the proper officer to determine and recover Input Tax Credit (ITC) wrongfully refunded under Section 54(3)(ii) of the Act. The petitioner argued that the power to determine the amount erroneously refunded is limited to tax paid, not paid, or short-paid, and not related to ITC wrongly refunded. The petitioner highlighted the availability of the remedy of appeal under Section 107 of the Act for challenging such determinations (paragraphs 3-4). The petitioner's counsel referred to previous judgments by a Coordinate Bench of the Court in similar cases, where the Court admitted the writ petition challenging the legality of show cause notices issued for recovery of ITC allegedly wrongly refunded. The petitioner sought the Court's intervention to restrain the respondents from further proceedings based on the show cause notice, emphasizing the similarity of the legal issues raised in the current case to those in the previous case (paragraphs 5-6). On the other hand, the CGST authorities contended that they acted within the statutory framework in determining the amount of ITC wrongfully refunded to the petitioner and served a show cause notice as per Section 73(1) of the Act. They argued that the petitioner's rush to court without responding to the show cause rendered the writ petition premature. The authorities asserted that the right to challenge refunds under Section 54(3)(ii) through an appeal under Section 107 is distinct from the power under Section 73. They urged the Court not to grant any interim order in favor of the petitioner and to dismiss the writ petition as premature and not maintainable (paragraph 7). The Court, after hearing arguments from both sides, acknowledged the prima facie case made by the petitioner and the similarity to a previous admitted writ petition challenging a show cause notice. The Court decided to hear the writ petition, directing the filing of an affidavit-in-opposition within six weeks and allowing a response within three weeks thereafter. The Court extended the time for the petitioner to respond to the show cause notice by two weeks and instructed the proper officer to decide on the show cause after providing an opportunity for a hearing to the petitioner. The Court also clarified that the order under Section 73(9) should not be given effect without its leave and indicated a future review of the need for an interim order based on the proper officer's decision (paragraphs 8-14).
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