M/S. Rajdhani Gas Services vs. Union Of INDIA

Held

The Court held that the communication dated 27.01.2020 was issued without adhering to the principles of natural justice. The Court noted the petitioner's submission that no show cause notice was issued and no opportunity of hearing was provided. While the petitioner also raised a point regarding the amendment of Section 16 of the CGST Act, 2017, the primary focus of the disposal was on the procedural lapse. The Court did not definitively rule on the eligibility of ITC under the amended Section 16. Instead, it disposed of the petition by granting liberty to the petitioner to respond to the communication. The Court directed that if the petitioner files a response within four weeks, the respondent authorities shall proceed in accordance with the law, ensuring compliance with the principle of natural justice. The issue of the admissibility of ITC under Section 16 was implicitly left to be decided by the authorities after following due process.

Facts

The petitioner, M/s. Rajdhani Gas Services, a proprietor registered under the Goods and Services Tax Act, 2017, filed its GSTR-3B returns for the period July 2017 to March 2018, availing Input Tax Credit (ITC). The Superintendent of Central Goods and Service Tax issued a communication dated January 27, 2020, to the petitioner demanding deposit of inadmissible ITC. The petitioner filed a writ petition before the High Court of Judicature for Rajasthan, Bench at Jaipur, seeking to quash this communication. The matter was taken up for early hearing upon the petitioner's application.

Key Issues

1. Whether the communication dated 27.01.2020, demanding deposit of inadmissible ITC, was passed in violation of the principles of natural justice, specifically without issuing a show cause notice and providing an opportunity of hearing? (Question of law). Petitioner's arguments: The petitioner contended that the communication demanding the deposit of inadmissible ITC was issued without a show cause notice and without affording an opportunity of hearing, thus violating the principles of natural justice. They further argued that Section 16 of the Central Goods and Service Tax Act, 2017, as amended, entitled them to avail the ITC in question. Revenue's arguments: The judgment records no specific arguments from the respondent revenue authorities.