2025 (7) TMI 138 - HC - GST

Challenge to pre-show cause notice dated 18th July 2024 issued in Form GSTDRC-01A threatening to invoke proceedings under Section 74 of the WBGST/CGST Act 2017 in respect of the tax period 2019-20 - HELD THAT - Noting that the petitioner seeks to challenge the show cause issued under Section 74 of the said Act and also considering the fact that the initiation of proceedings are based on alleged fraudulent availment of input tax credit in respect of the supplies effected by the sellers whose registration has been cancelled with retrospective effect the writ petition should be heard. However having regard to the fact that the Amnesty Scheme introduced by the respondents in terms of insertion of Section 128A in the said Act is due to expire on 30th June 2025 and noting that the petitioner may have an arguable case the liberty should be afforded to the petitioner to avail the benefits of the Amnesty Scheme introduced pursuant to insertion of Section 128A in the said Act without prejudice to the rights and contentions of the parties in the present writ petition. In the event the petitioner applies before the appropriate authority for availing the benefits of the Amnesty Scheme the concerned authority shall permit the petitioner to avail such benefits by treating the show cause issued in Form GST DRC 01 dated 5th February 2025 to be under Section 73 of the said Act. All further steps including the deposit of tax pursuant to the aforesaid shall however abide by the result of the petition. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date - Liberty to mention for inclusion in the list after expiry of the period for filing of affidavits.

Summary

Calcutta High Court, Raja Basu Chowdhury, J., considered a writ petition challenging a pre-show cause notice dated 18 July 2024 under Section 74 of the WBGST/CGST Act, 2017, relating to the tax period 2019-20. The petitioner sought to additionally challenge a subsequent show cause notice dated 5 February 2025 (Form GST DRC-01), which was uploaded prior to the petition but omitted due to oversight. The petitioner contended that proceedings should have been initiated under Section 73, not Section 74, and that issuance under Section 74 denied her the benefit of the Amnesty Scheme introduced by insertion of Section 128A.The Court granted leave to treat the February 2025 show cause notice as part of the writ petition and allowed the petitioner liberty to avail the Amnesty Scheme benefits (expiring 30 June 2025) by treating the show cause as issued under Section 73, "without prejudice to the rights and contentions of the parties." The authority was directed to permit such availing of the scheme, with all further steps, including tax deposit, subject to the writ petition's outcome. The Court ordered the filing of affidavit-in-opposition within six weeks and permitted replies within four weeks, reserving liberty to list the matter thereafter.Key holdings: - The petitioner may challenge show cause notices under Section 74 by treating them as under Section 73. - Amnesty Scheme under Section 128A may be availed notwithstanding ongoing proceedings, subject to the petition's result. - Procedural liberty granted to petitioner to apply for Amnesty Scheme benefits without prejudice.