M/S Toyotetsu INDIA Private Limited vs. Union Of INDIA

2023 issued by the Respondent No.4 in Form GST DRC-01 enclosed at Annexure-A. b) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned show cause notice bearing No.JCCT(VIG)/ACCT (Vig-01)/73-74/2023-24 dated 29.09.2023 issued by the Respondent No.6 enclosed at Annexure-B. c) Hold that the Petitioner has rightly availed input tax credit of Rs.5,26,86,125/- in respect of the IGST paid on manpower supply services received by the Petitioner during the period 2017-2022 (till December 2022); d) Hold that the interest under Section 50 of the CGST Act, 2017, including Rs.64,82,218/- for the period 2017-18, on the belated payment of IGST of Rs.5,26,86,125/- is not payable; e) Hold that the interest under Section 50 of the CGST Act, 2017 on the input tax credit availed is not payable; f) Hold that the penalty of Rs.7,71,693/- is not imposable; g) Hold that the penalty in terms of Section 74(1) and Section 122(1)(vii) and (x) is not imposable; h) Pass such further order(s) and other reliefs as the nature and circumstances of the case may require.”

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. NC: 2025:KHC:14433

In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner invited my attention to the impugned Show Cause Notice at Annexure – B dated 29.09.2023 issued by respondent No.6 – State revenue in order to point out that even though proceedings have been initiated by respondent No.4 in November 2022, respondent No.6 – State authorities have initiated proceedings vide impugned Show Cause Notice at Annexure – B, which is barred under Section 6(2)(b) of the KGST Act and consequently, the same deserves to be quashed in the light of the judgment of the this Court in the M/s. Toyota Kirloskar Motor Pvt. Ltd. Vs. Union of India and others – W.P.No.22952/2023 dated 21.08.2024 and M/s. Bosch Automotive Electronics India – W.P.No.24897/2023 dated 29.07.2024. 4. It is also submitted that denial of the Input Tax Credit in favour of the petitioner for the period from July 2017 – December 2022 is also illegal and arbitrary in the light of the Circular No.211/5/2024-GST dated 26.06.2024, which has been relied upon by this Court in the aforesaid judgments. It is therefore submitted NC: 2025:KHC:14433 that the impugned Show Cause Notice at Annexure – A deserve to be quashed to the extent of denial of Input Tax Credit in favour of the petitioner and the matter remitted back to respondent No.4 for reconsideration afresh in accordance with law.

It is also submitted that the valuation for the purpose of payment of taxes plus interest is covered by Circular No.210/4/2024-GST dated 26.06.2024 and the decision of the Delhi High Court in the case of Thales India Private Limited Vs. Additional Commissioner of CGST, Audit – II, Delhi & Another – 2025 (2) TMI 245 – Delhi High Court. It is therefore submitted that the petition may be allowed and disposed of accordingly.

It is further submitted that though respondent No.4 purportedly invoked Section 74(1) of the CGST / KGST Act for the purpose of initiating proceedings vide Annexure – A dated 27.09.2023, the same may be treated / construed as proceedings under Section 73 of the CGST / KGST Act so as to enable the petitioner to avail the benefit of Amnesty scheme under Section 128A of the CGST Act. NC: 2025:KHC:14433

Per contra, learned counsel for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.

A perusal of the material on record will indicate that it is an undisputed fact that in November 2022, respondent No.4 had initiated proceedings / intimation under Section 70 of the CGST Act by issuing letter on 28.11.2022, which is followed by the Show Cause Notice dated 27.09.2023. Meanwhile, despite having initiated proceedings on 28.11.2022, it is respondent No.6 – State authorities who has issued the impugned Show Cause Notice at Annexure – B. In this context, it is pertinent to note that the said issue is answered by this Court in M/s. Toyota Kirloskar Motor Pvt. Ltd. Vs. Union of India and others – W.P.No.22952/2023 dated 21.08.2024, wherein it is held as under: