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TMI Blog2024 (9) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that it is consistent view of the Hon ble Supreme Court that if the Show Cause Notice is without jurisdiction then the same can be challenged by filing writ petition before the High Court under Artilce 226 of the Constitution of India. It is not found that the basic ingredients required for initiating proceedings under Section 74 of the CGST Act are present in the impugned Show Cause Notice dated 30.12.2023. Therefore the entire exercise including the Show Cause Notice is without jurisdiction and thus this writ petition under Article 226 of the Constitution of India is maintainable. The impugned Show Cause Notice dated 03.08.2024 in its present form lacks basic ingredients to proceed in the matter under Section 74 of the CGST Act. Therefore, the impugned Show Cause Notice dated 03.08.2024 and the entire exercise initiated pursuant thereto is absolutely without jurisdiction and is liable to be quashed. Petition allowed. - Hon'ble Shekhar B. Saraf And Hon'ble Manjive Shukla JJ. For the Petitioner : Atul Gupta For the Respondent : C.S.C. ORDER 1. Heard Sri Atul Gupta, learned counsel appearing for the petitioner and Sri Ankur Agarwal, learned Standing Counsel appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CGST Act and out of such total transitional credit, an amount of Rs. 25,31,801/- pertaining to Cess was already reversed. 6. Thereafter on 30.09.2023 a Show Cause Notice under Section 73 of the CGST Act was issued to the petitioner whereunder for the period from July, 2017 to March, 2018 a demand of Rs. 5,76,12,310/- along with interest and penalty was proposed. The petitioner submitted a detailed reply on 18.11.2023 to the aforesaid Show Cause Notice issued under Section 73 of the CGST Act. The petitioner in its reply submitted that credit of Rs. 2,19,31,776/- has been claimed under Section 140(1) and 140(9) of the CGST Act and further out of such credit of Rs. 2,19,31,776/- and amount of Rs. 25,31,801/- pertaining to Cess was already reversed. The petitioner in its reply also clarified that Section 140(9) allows the registered person to take credit on the amount of service tax, which was earlier reversed due to nonpayment of consideration, on payment of the consideration within a period of three months from the appointed date. 7. The Deputy Commissioner, State Tax, Sector-2 NOIDA, U.P. after considering the reply submitted by the petitioner and carrying out the verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority has some information or evidence to make out a prima-facie belief that the assessee has wrongly availed or utilized ITC by reason of fraud, or any wilful mis-statement or suppression of facts, the proceedings under Section 74 of the CGST Act would be without jurisdiction and cannot be carried out. 12. It has been argued on behalf of the petitioner that for the same amount of Input Tax Credit availed by the petitioner, once the proceedings under Section 73 have been dropped in favour of the petitioner, same cannot be reopened under Section 74 of the CGST Act by simply stating that the petitioner had availed excessive Input Tax Credit. 13. It has also been argued on behalf of the petitioner that since the Show Cause Notice issued under Section 74 of the CGST Act does not contain the essential ingredients for initiating proceedings under Section 74 of the CGST Act, as there is no mention in the impugned Show Cause Notice that petitioner has wrongly availed or utilized ITC by reason of fraud, or any wilful mis-statement or suppression of facts, the impugned Show Cause Notice dated 3.8.2024 is absolutely without jurisdiction. 14. Learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in subsection (10) for issuance of order. (3) Where a notice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid amount was transferred Input Tax Credit (ITC) by filing Form GST TRAN-1 in terms of the Section 140 of the CGST Act. Out of the aforesaid amount of Rs. 5,47,57,755/- petitioner availed Input Tax Credit amounting Rs. 3,28,25,979/- and thereafter amount of Rs. 2,19,31,776/- transitional credit remained balance with the petitioner in State of Uttar Pradesh. Petitioner also reversed Rs. 25,31,801/- pertaining to carried forward cess. 20. We find that proceedings under Section 73 of the CGST Act were initiated against the petitioner by issuing a Show Cause Notice on 30.09.2023 whereby petitioner was required to show cause in respect of the excessive ITC availed by the petitioner during the period from July, 2017 to March 2018. Petitioner filed a detailed reply and after considering the said reply and verification of the documents and the amounts, Respondent No. 2 passed order on 30.12.2023 whereby the proceedings in respect of excessive ITC availed by the petitioner, were dropped. 21. We take note of the fact that Section 73 of the CGST Act gives power to the adjudicating authority to initiate proceedings for recovery of wrongly availed or utilized Input Tax Credit along with int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Supreme Court in the case of Raj Bahadur Narain Singh Sugar Mills Ltd. Vs. Union of India, reported in 1996 (88) E.L.T. 24 (S.C.) has held as follows:- 9. We have set out the relevant parts of the show cause notice. It speaks of an erroneously granted rebate. There is no mention in it of any collusion, wilful mis-statement or suppression of fact by the appellants for the purposes of availing of the larger period of five years for the issuance of a notice under Rule 10. The party to whom a show cause notice under Rule 10 is issued must be made aware that the allegation against him is of collusion or wilful misstatement or suppression of fact. This is a requirement of natural justice. It is also the law, laid down by this Court in Collector of Central Excise v. H.M.M. Limited 1995 (76) E.L.T. 497. It has been said there with reference to Section 11A of the Central Excises and Salt Act, 1944, which replaced Rule 10, that if the authorities propose to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions and omissions stated in the proviso is committed to extend the period from six months to five years. Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficult to understand how the Revenue could sustain the notice under the proviso to Section 11A(1) of the Act. The Additional Collector while conceding that the notice had been issued after the period of six months prescribed in Section 11A(1) of the Act had proceeded to observe that there was wilful action of withholding of vital information apparently for evasion of excise duty due on this waste/by-product but counsel for the assessee contended that in the absence of any such allegation in the show cause notice the assessee was not put to notice regarding the specific allegation under the proviso to that subsection. The mere non-declaration of the waste/by-product in their classification list cannot establish any wilful withholding of vital information for the purpose of evasion of excise duty due on the said product. There could be, counsel contended, bona fide belief on the part of the assessee that the said waste or by-product did not attract excise duty and hence it may not have been included in their classification list. But that per se cannot go to prove that there was the intention to evade payment of duty or that the assessee was guilty of fraud, collusion, misconduct o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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