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TMI Blog2025 (3) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings. The Court, after taking note of the several decisions of the Hon'ble Supreme Court held that there is always an exception to the rule of alternate remedy but when the orders of proceedings are wholly without jurisdiction, there is an exception drawn and writ petitions were held to be maintainable - Thus, when a jurisdictional issue is being canvassed, the alternate remedy provided under the CGST Act would not operate as a restriction for this Court to decide upon the jurisdiction of the respondents to issue the show-cause notice invoking the provisions of the CGST Act. The Court in the case of Usha Martin Limited vs. Additional Commissioner, Central GST and Excise, Jamshedpur and Ors. noted section 174 of the C.G.S.T Act and other Constitutional provisions and held: "it is obvious the new regime had to make provisions for the transactions which remained incohate under the existing law. It is also a well-settled legal position that on account of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and the same was filed by the appellants on 9th November, 2017. Even prior to filing of the Form TRAN 1 on 9th November, 2017, the appellants had informed the Superintendent of Service Tax by letter dated 31st October, 2016 stating that during the audit for the financial year 2015-16, it was observed that the appellants have a balance of Rs.41,55,632.00/- on account of unavailed CENVAT credit. It was explained that the same has accrued and has not been utilised as Input Service Tax in the financial year 2015-16 and therefore, the appellants have claimed the said amount as a part of Opening Balance of CENVAT Credit in the Service Tax Return filed for April - September, 2016. The appellants requested the Department to allow the same as CENVAT Credit in the current year 2016-17. Much thereafter, a letter was issued to the appellants calling for various documents for the verification of the transitional credit. This was furnished by the appellants to the authority on 5th January, 2018 followed by another communication addressed to the Assistant Commissioner dated 9th January, 2018. After about more than eight months, another communication was sent by the Superintendent dated 11th Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are liable to be dropped. 8. Thus, the legal question to be answered in the instant case is whether the showcause notice dated 18th September, 2023 issued under Section 73 of the CGST Act was within the jurisdiction of the authority alleging that there is an irregularity in the transitional credit of CGST availed under TRAN 1. 9. We need not labour much to find an answer to the above mentioned query as identical issue was decided by the Hon'ble Division Bench of the High Court of Jharkhand in the case of Usha Martin Limited vs. Additional Commissioner, Central GST and Excise, Jamshedpur and Ors. reported in [2024] 124GSTR 396 (Jha.) : MANU/JH/1261/2022. In paragraph 9 of the said judgment, the contention raised by the Department has been noted and in fact, the learned Senior Standing Counsel appearing for the respondents/Department has made identical submission before us to sustain the impugned show-cause notice. 10. The Hon'ble Court firstly considered as to the scope of entertaining a writ petition under Article 226 of the Constitution challenging a show-cause notice when the normal course to be adopted is to submit a reply and face the adjudication proceedings. The Court, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transitional provisions, the Court proceeded to examine the next question i.e. whether a registered person could transition inadmissible CENVAT Credit of the existing regime to the G.S.T. regime under section 140 of the C.G.S.T. Act without any check or proceeding against him. In this regard, the Court noted section 174 of the C.G.S.T Act and other Constitutional provisions and held: "it is obvious the new regime had to make provisions for the transactions which remained incohate under the existing law. It is also a well-settled legal position that on account of the 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." 14. Ultimately, the Court held: "that in respect of previous proceedings for such contravention, the cases have been kept in call book and in some of them the learned CESTAT has stayed the recovery of the tax......" "If proceedings for transition of CENVAT Credit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication order, which was impugned therein and also issued consequential directions. However, the liberty for the authority was preserved as per the observations made in Usha Martin Limited (supra).
18. In the light of the above discussions, we have no hesitation to hold that the impugned show-cause notice is without jurisdiction. In the result, the appeal is allowed along with the connected application (IA No. CAN 1 of 2023). The order passed by the learned Single Bench is set aside. Consequently, the writ petition is allowed and the impugned show-cause notice is quashed.
19. However, the respondent authorities are at liberty to initiate proceeding under the provisions of the then existing law i.e. the Finance Act, 1944 as amended from time to time read with CENVAT Credit Rules, 2004 against the appellants for the relevant tax period. However, such proceedings should be in accordance with law.
20. No costs.
21. Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
( T. S. SIVAGNANAM ) CHIEF JUSTICE
I agree.
( CHAITALI CHATTERJEE ( DAS ) , J. ) X X X X Extracts X X X X X X X X Extracts X X X X
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