9911796707
TMI Blog2024 (1) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... sued without passing of adjudication order and in violation of Principle of natural justice. (iii) For a quashing and setting aside show cause notice being reference no. 1519 dated 21.07.2018 (Annexure-2) being vague in nature as it does not fulfill the ingredients of proper show cause notice and is issued in excess of its jurisdiction. (iv) For refund of an amount of Rs. 19,08,880/- and/or re-crediting the said amount in Electronic Credit Ledger of the Petitioner. 2. The brief facts of the case as enumerated in this application is that the Petitioner is engaged in the business of trading of Iron and Steel within the state of Jharkhand. For the purpose of said trading the Petitioner purchases Iron and Steel from the market upon payment of tax, being in the nature of Input Tax. As per the provision of the then JVAT Act, the Petitioner was entitled for adjustment of the Input Tax paid by him at the time of purchase of the good from its Output Tax Liability and if any excess claim for Input Tax remains, the same can be carried forward to the subsequent period. From 1st July, 2017 the Government of India brought all together a new Act governing the tax laws by clubbing the then e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent department in their Counter Affidavit at para-15. Further, on 19.01.2021 an amount of Rs. 19,08,880/- has been suo-moto debited from the credit ledger of the Petitioner. 5. Ms. Amrita Sinha, learned counsel for the petitioner in course of arguments has raised following issues:- (i) The respondent GST department is not correct in assuming jurisdiction and initiating a proceeding u/s 73/74 of the JGST Act against transition of Input Tax Credit from JVAT regime to GST regime, on the alleged ground that ITC is inadmissible under the JVAT Act. (ii) The entire proceeding is void-ab-initio since no detailed Show Cause Notice has ever been issued by the Respondent department and that straightaway FORM GST DRC-01 was issued being "Summary of Show Cause Notice". Moreover, the essential ingredient of the Show Cause Notice is missing thereby. (iii) The entire proceeding is hit by the Principles of Natural Justice, as no opportunity was ever granted to the Petitioner before fastening liability upon the Petitioner by straightaway issuing FORM GST DRC-07 and that no adjudication order has ever been passed, as duly admitted by the Respondent GST department in their Counter A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is further stated and submitted that the notification on which the Respondent department has relied upon in the Summary of Show Cause Notice for the period 2015- 16 & 2016-17 is also not applicable in the case of the petitioner, as this Hon'ble Court in the case of Ramkrishna Forgings Limited being W.P.(T) no. 134 of 2016 vide order dated 29.01.2020 at para 54(V) has held that in view of the fact that Rule 26(11A) has been declared to be prospective in operation i.e. with effect from 17.02.2017, it is hereby declared that for the period 23.09.2015 to 16.02.2017 proviso inserted to clause (ii) and clause (iii) of sub-section 4 of section 18 of the JVAT Act cannot be given effect to in absence of any machinery provisions and no forfeiture of Input tax credit shall be given effect to during the period 23.09.2015 to 16.02.2016. The aforesaid decision passed in Ramkrishna Forgings Ltd. was challenged by the State before the Hon'ble Supreme Court being SLA (C) no. 1982 of 2021, wherein the Hon'ble Supreme Court vide order dated 07.09.2021 has agreed with the view of this Hon'ble Court and has declined to interfere with the findings of this Court. 7. Mr. Ashutosh Anand learned AAG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court rendered in the case of Usha Martin Limited being W.P.(T) No. 3055 of 2022 dated 10.11.2022, wherein this Court at para 20,21,22 has held as under :- 20. It is consequent to such a novel legislation that both the Centre and the States enacted their G.S.T. laws. However, as is obvious, the new regime had to make provisions for the transactions which remained inchoate under the existing law. It is also a well settled legal position that on account of new legislation the implementation of the G.S.T. regime could not be left to a realm of uncertainty. For a violation under the existing law, parallel proceedings could not be conducted under the existing law at the behest of jurisdictional officer and at the same time under the new law at the instance of another jurisdictional officer of the G.S.T. Act. It is in this conceptual background that the purport and construction of the repeal and saving provisions under Section 174 of the C.G.S.T. Act is to be understood. The existing Act, such as the Central Excise Act, 1944, the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, Additional Duties of Excise (Goods of Special Importance Act, 1957), The Additional Duties of Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, adjudication proceedings, legal proceedings which were for recovery of arrears or remedy in respect of any such duty or tax etc., which were pending or such other legal proceedings or inchoate rights which were in existence on the appointed day, for them legal proceedings may be instituted, continued or enforced as if these Acts had not been so amended or repealed. To decide whether any particular transaction is affected by the repeal of an Act, it is necessary to ascertain whether the transaction in question was completed when the Act was repealed. The present repeal and saving clause expressly engrafts that notwithstanding the repealing Act the repeal shall not affect any right or liability acquired accrued or incurred......... 22. Therefore, it is clear that the repeal of the existing laws upon coming of the G.S.T. law regime did not leave a vacuum as to past transactions which were not closed. The repeal and saving clause (e) under Section 174(1) of the C.G.S.T. Act allowed such legal proceedings to be instituted in respect of inchoate rights except rights under transactions which were past and closed.............. 9. As a matter of fact, section 174 of the JGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding have been completely disregarded. Reference may ay be made to para 8, 17, 18, 20, 21, 22 & 23 of the aforesaid judgment. In the case at hand, FORM GST DRC-01 (Annexure-2) in question has been issued without specifying any date of hearing nor the relevant provisions have been struck down for the reason that the Show Cause Notice has been issued u/s 73 & 74 both. The purpose of Section 73 and 74 of the JGST Act are entirely different from each other and the proceedings under either of the section can be initiated as the foundational facts do suggest. Thus, FORM GST DRC-01 being 'Summary of Show Cause Notice" does not constitute a proper Show Cause Notice as the mandatory ingredients are absent. Thus, on this score alone, the impugned show-cause notice is fit to be quashed. 11. So far as issue no. (iii) is concerned, it is evident that in the present case no adjudication order has been passed by Respondent authority and they have straightaway proceeded to issue FORM GST DRC- 07 being 'summary of order' in utter disregard to the mandatory provisions of the GST Act and thus the entire proceeding is non-est in the eyes of law. The fact that no adjudication order has been pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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