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2024 (2) TMI 588 - KARNATAKA HIGH COURTReversal of input tax credit (ITC) u/s 17(5)(h) of the CGST Act, 2017 can be sought on presumptive basis or not - Allegation of short declaration of Outward Supply and excess claim of ITC - levy of interest under Section 50 of the CGST Act and penalty under Section 122(2)(a) - seeking quashing endorsement notice issued by Respondent No. 3 as arbitrary, vague and in contradiction to the provisions of the CGST/KGST and violative of Article 265 of the Constitution - HELD THAT:- The provisions of Rule 142(1) of the Central Goods and Service Tax Rules, 2017, prior to the Central Goods and Service Tax [Sixth Amendment] Rules, 2019 only contemplated issuance of Notice under Section 73[1], 74[1] and 76[2] and other provisions of the CGST/ KGST Act with a summary in FORM GST DRC-01. With the amendment under the aforesaid Amendment Rules with effect from 09.10.2019, Rule 142(1A) is included, and this Rule stipulates that the proper officer shall, before service of notice under Section 73 (1) [as also under Section 74(1)] of the GST Act, communicate the details of the tax, interest and penalty as is ascertained in Part A of Form GST DRC – 01A. The proper office is now given the option of issuing intimation in Part A of FORM GST DRC – 01A. Simultaneously with the introduction of Rule 142(1A) under the Central Goods and Service Tax [Sixth Amendment] Rules, 2019, Rule 142(2A) is introduced. The provisions of this Rule stipulate inter alia that if the person to whom notice is issued in Part A of Form GST DRC – 01A is desirous to file any submissions against the proposed liability, such submissions can be filed in Part B of Form GST DRC – 01A. This Court must opine that if indeed the petitioner has filed submissions, as part of its submissions in Part B of FORM GST DRC – 01A, asserting that it has offered different prices [for the same supply of goods and services] at different places and declared Returns accordingly, the implication thereof should be examined in the light of the provisions of Section 15 of the KGST Act for a reasonable and just commencement of the proceedings under Section 73(1) of the GST Act. The petitioner’s grievance insofar as issuance of impugned notice incorporating Part-II thereof must necessarily be examined in the light of this requirement and the fact that the notice does not refer to the submissions filed in reply to the notice in Part B of FORM GST DRC-01A and though this Court can see the reason for issuance of the impugned Show Cause Notice before 30.09.2023 but when the infirmity as aforesaid is obvious, this Court must intervene under Article 226 of the Constitution of India and pass just and reasonable order to ensure that the proceedings prevail in accordance with the requirement of law. Petition allowed in part.
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