Prodair Air Products INDIA Private Limited vs. State Of Kerala

Held

The Court held that the show cause notice was neither a nullity nor without jurisdiction, representing only the commencement of proceedings. Relying on precedents, including a Division Bench judgment and a Supreme Court order, the Court declined to interfere with the show cause notice at this preliminary stage. The petitioner was granted liberty to file a reply to the show cause notice, and the Assessing Authority was directed to proceed with adjudication expeditiously.

Facts

The petitioner, a manufacturer of industrial gases, migrated from the KVAT regime to GST. They claimed transitional input tax credit (ITC) under Section 140 of the CGST/SGST Act, including for raw materials (natural gas) and capital goods, by filing Form GST TRAN-1. The respondent issued a show cause notice under Section 73(1) of the KSGST Act, proposing to disallow this transitional credit, contending that the petitioner was not entitled to it for natural gas (outside GST) and capital goods (not reflected in prior VAT returns). The petitioner challenged this show cause notice via a writ petition.

Key Issues

The key legal issue was whether a writ petition could be entertained to quash a show cause notice issued under Section 73(1) of the KSGST Act, particularly when the notice was not a nullity or without jurisdiction. The underlying dispute concerned the petitioner's entitlement to transitional input tax credit claimed under Section 140.