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2024 DIGILAW 1897 (GUJ)

Shakti Polyfab Pvt. Ltd. v. State Of Gujarat

2024-10-11

BHARGAV D.KARIA, D.N.RAY

body2024
JUDGMENT : BHARGAV D. KARIA, J. 1. Heard learned advocate Mr. Anand Nainavati for the petitioner and learned Assistant Government Pleader Ms. Shrunjal Shah for the respondent. 2. Rule returnable forthwith. Learned AGP Ms. Shrunjal Shah waives service of notice of rule on behalf of respondent State. 3. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs: “a) That Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned summary of the order issued vide FORM GST DRC 07 having reference ZA240119000357X dated 11.01.2019; no. and (Exhibit-1) (b) That Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus, a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned recovery notice dated 21.03.2024;(Exhibit -2) (c) That Pending the hearing and final disposal of this petition, stay the operation of impugned summary of the order issued vide FORM GST DRC 07 having reference no. ZA240119000357X dated 11.01.2019 and not initiate any recovery proceedings against the petitioners; (Exhibit-1) (d) For ad-interim relief in terms of prayer (c) above; e) Pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case; (f) for costs of this Petition; (g) for such further and other reliefs as the nature and circumstances of the case may require.” 4. Brief facts of the case are that the petitioner is a private limited company and is engaged in the business of manufacturing of packaging materials falling under Chapter Heading 3923 at their factory located at Kalol, Gandhinagar, Gujarat. 5. In pre-GST regime, the petitioner was registered with the Central Excise department and were regularly filing all statutory returns as required under the Central Excise laws and availing CENVAT credit facility on inputs, input services and capital goods received by them. With the introduction of the Goods & Services Tax ("GST") regime w.e.f. 01.07.2017, the petitioner was migrated to the GST regime with GSTIN No.24AAMCS5827N1ZQ. 6. After introduction of GST, all the indirect taxes were subsumed under GST law. With the introduction of the Goods & Services Tax ("GST") regime w.e.f. 01.07.2017, the petitioner was migrated to the GST regime with GSTIN No.24AAMCS5827N1ZQ. 6. After introduction of GST, all the indirect taxes were subsumed under GST law. As per the GST law, credit of inputs, inputs services and capital goods which were lying unutilised as on the appointed date i.e., 01.07.2017 can be claimed by the petitioner. 7. In the course of conducting its business, the petitioner receives supplies of inputs and input services from various suppliers. Wherever eligible, the petitioner avails Input Tax Credit ('ITC') of the supplies received and captures such availment in the requisite forms as prescribed under the CGST Act read with the CGST Rules, IGST Act with the IGST Rules and under the Gujarat State Goods and Services Tax Act, 2017 and paid GST @ 18% on the finished goods supplied in the GST regime. 8. In accordance with the relevant instructions, the petitioner was periodically filing FORM GSTR-3B from July 2017 within the stipulated timelines. 9. Scrutiny of returns filed by the petitioner was carried out by the officers of respondent No.3 in terms of Section 61 of CGST Act, 2017 read with Rule 99 of the CGST Rules, 2017. 10. The petitioner was issued with Form GST ASMT-10 dated 15.11.2018 to explain the reasons for the discrepancies in the value of Total ITC as per GSTR-3B and value of Total ITC as per GSTR-2A showing difference of INR 96,86,603/-. 11. Petitioner addressed letter dated 16.11.2018 to the respondents stating that the difference is on account of Purchase made from M/s ONGC Petro Additions Ltd. (SEZ Unit) and IGST @ 18% amounting to Rs. 94,38,472/- paid thereon was not reflected in GSTR 2A and that mere mismatch between ITC claimed under FORM GSTR-2A and FORM GSTR-3B would not imply excess claim of ITC liable for reversal. 12. It is the case of the petitioner that subsequent to the filing of reply vide letter dated 16.11.2018, there was no subsequent communication from the department and the petitioner was under bonafide belief that there explanation has been accepted by the department and therefore no show cause notice has been issued to them. 13. 12. It is the case of the petitioner that subsequent to the filing of reply vide letter dated 16.11.2018, there was no subsequent communication from the department and the petitioner was under bonafide belief that there explanation has been accepted by the department and therefore no show cause notice has been issued to them. 13. The petitioner, once again, on 07.01.2022, wrote a letter to the respondent No. 3 stating that in the year 2017-2018, there is a difference in GSTR 2A and GSTR 38 because two of the entities i.e. ONGC Petro Addition Limited and Reliance Industries Ltd. are situated in SEZ area and the total ITC amounting to Rs. 94,38,517/- pertaining to the said units were not reflected in FORM GSTR 2A. 14. Respondent No. 2 thereafter issued impugned recovery notice dated 21.03.2024 for recovery of demand amounting to INR 3,76,17,905/- for the period July 2017 to May 2018, under IGST Act, 2017, CGST Act, 2017 and SGST Act, 2017 as confirmed vide DRC 07 reference no. ZA240119000357X dated 01.11.2019 on account of difference of ITC between Form GSTR-3B and GSTR-2A. 15. It is the case of the petitioner that based on the said recovery letter/notice, the petitioner logged in the GSTN portal to confirm if any order was issued by the department, however, the petitioner was able to only download summary of the order issued vide FORM GST DRC 07 having reference no. ZA240119000357X dated 01.11.2019. There was no speaking order issued by the department and only summary of order was uploaded stating the issue involved as excess ITC claimed and though the summary order mentioned the order no. 9499 dated 11.01.2019 however no such order was available on the portal. 16. The petitioner thereafter vide letter dated 26.03.2024, approached the respondent No. 3 stating that they have neither received any show cause notice nor any demand order was received by the petitioner till date and further that on the portal only the summary of the order was available. 17. Being aggrieved by such action of the respondent authorities, the petitioner have preferred the present petition. 18. Learned Assistant Government Pleader Ms. Shrunjal Shah has placed on record letter dated 09.07.2024 issued by respondent no.3 addressed to her wherein it is stated that the impugned order in Form GST DRC-07 is passed without issuing notice in Form DRC-01 in a summary form. 18. Learned Assistant Government Pleader Ms. Shrunjal Shah has placed on record letter dated 09.07.2024 issued by respondent no.3 addressed to her wherein it is stated that the impugned order in Form GST DRC-07 is passed without issuing notice in Form DRC-01 in a summary form. It was therefore submitted by learned Assistant Government Pleader Ms. Shah that appropriate order be passed for passing a fresh order after following the procedure prescribed in Rule 142 of the GST Rules. 19. Considering the above submissions, impugned summary order dated 11.01.2019 is required to be quashed and set aside as the same is passed without there being any notice issued in Form DRC-01 as provided under the GST Rules. 20. Admittedly in facts of the case respondent authorities did not serve any show cause notice upon the petitioner and straightaway issued the impugned order in Form GST DRC-07 which does not contain any reasons. 21. Therefore, without going into the merits of the matter, the impugned summary order in Form GST DRC-07 dated 11.1.2019 issued by the respondent is hereby quashed and set aside and the matter is remanded back to the respondents for de novo adjudication after giving an opportunity of hearing to the petitioner as fresh order is required to be passed in accordance with law. Such exercise shall be completed within 12 weeks from the date of receipt of a copy of this order. 22. This Court has not expressed any opinion on the merits of the case of the petitioner. The Entire exercise that may take place pursuant to the show cause notice which may be issued to the petitioner shall be at large on merits. 23. Petition is disposed of accordingly. Rule is made absolute to the above extent. No order as to costs.