M/S. Priyanka Bullion Private Limited vs. Union Of INDIA

Held

The Court held that the show cause notice was issued on the premise that the transition of credit was invalid due to the non-filing of Form TRAN-1. However, the petitioner has since filed Form TRAN-1 based on the directions of the Supreme Court of India. Therefore, it is appropriate for the impugned show cause notice to be kept in abeyance until orders are passed on the claim of transition credit under the now-filed Form TRAN-1. The Court observed that while it would not normally interfere with a show cause notice, it was doing so in this instance to avoid multiplicity of proceedings. The Court disposed of the writ petition with the observation that the respondent, after deciding on the transition credit claimed in Form TRAN-1, could proceed with the show cause notice if circumstances warranted, and pass orders in compliance with the prescribed legal procedures. The issue of whether the original show cause notice was validly issued prior to the filing of TRAN-1 was implicitly left undecided, as the focus shifted to the subsequent filing.

Facts

The petitioner, M/s. Priyanka Bullion Private Limited, filed a writ petition challenging a show cause notice dated 09.11.2020 issued by the Superintendent of CGST and Central Excise, Madurai. The notice proposed the levy of interest and penalty on Input Tax Credit (ITC) allegedly availed erroneously without filing Form TRAN-1, based on GSTR-3B. The petitioner submitted that the Supreme Court of India, in the case of Union of India vs. FILCO Trade Centre Private Limited, had permitted assessees to file fresh/revised Form TRAN-1/TRAN-2 between 01.09.2022 and 31.10.2022, a period later extended to 30.11.2022. The petitioner filed Form TRAN-1 on 11.10.2022, which was pending. Despite this, the respondent issued a communication on 23.09.2022 and later requested the petitioner to appear for adjudication of the show cause notice.

Key Issues

1. Whether the impugned show cause notice, proposing levy of interest and penalty for alleged erroneous availment of Input Tax Credit without filing Form TRAN-1, should be quashed or kept in abeyance in light of the Supreme Court's directions permitting the filing of Form TRAN-1. Petitioner's contention: The petitioner argued that the Supreme Court's order in Union of India vs. FILCO Trade Centre Private Limited, allowing the filing of Form TRAN-1 between 01.09.2022 and 31.10.2022 (extended to 30.11.2022), rendered the basis of the show cause notice obsolete, as they have now filed the required Form TRAN-1. They relied on the Supreme Court's directions. Revenue's contention: The learned counsel for the respondent submitted that the Supreme Court's order has thereafter been extended until 30.11.2022. The judgment does not record any further specific arguments from the revenue regarding the validity of the show cause notice in light of the petitioner filing TRAN-1.