TMI Blog2021 (11) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... nations 1 and 2, as it stands now, may be held to be mindless which, in law, would amount to issuance of a notice without due regard to the provisions of law as well as facts requiring existence or non-existence of a material fact for assumption of jurisdiction. We are conscious of the settled law that the High Court in exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India ought not to interfere with a show-cause notice as a matter of routine or for the mere asking. However, it is only in a case where a show-cause notice is found to be totally non-est in the eyes of law for absolute want of jurisdiction of the authority issuing the notice to even investigate into the facts that the writ court may, instead of relegating the noticee to respond to the show-cause notice, itself examine the point of lack/want of jurisdiction. Perusal of the impugned show-cause notice would reveal assumption of jurisdiction by the respondent no.3 based on introduction of Explanation 3 to Section 140 of the CGST Act read with Explanations 1 and 2 thereof without showing application of mind as to whether the amended Explanations 1 and 2 have been made operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess: ₹ 71,77,464/- and PLA: ₹ 1,65,19,038/- availed by them should not be rejected and recovered under subsection (1) of Section 73 for the above discussed reasons. (ii) the amount of ₹ 3,83,43,753/- reversed by them in their Electronic Credit Ledger in February 2018 (shown in the GSTR-3B for the month of January 2018) should not be appropriated. (iii) interest amounting to ₹ 14,11,890/- calculated @24% per annum on ₹ 3,83,43,753/- reversed by them should not be recovered under Section 50(3) of the CGST Act. (iv) penalty under Section 122(2)(a) of the CTST Act should not be imposed. 3. According to the petitioner, the impugned notice proceeds on the footing that the transitional arrangement for taking Input Tax Credit in the cases of CESS such as Education Cess (E Cess), Secondary Higher Education Cess (SHE Cess) and Krishi Kalyan Cess (KK Cess) has been taken away by a retrospective amendment. However, the petitioner claims that not only on the date of its issuance but even on the date this writ petition was presented, the amendment(s) referred to in the impugned notice had not come into force and, therefore, the impugned notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issue such notice; hence, the petitioner ought to be directed to raise all points that are available to it in defence for consideration of the said officer. It was further contended by him that the point urged by the petitioner that the impugned show cause notice is not founded on any legal premises, is a jurisdictional issue; and such issue can even be urged by it for an adjudication by the respondent no.3. In view of the impugned show-cause notice not suffering from absolute want of jurisdiction to even investigate facts, and the respondent no.3 having issued the notice without prejudging any issue, he contended that this is not an appropriate stage for this Court to pronounce on the merits of the petitioner s claim and set aside the impugned notice. If at all the petitioner is successful in persuading the respondent no.3 not to proceed further, the notice would obviously have to be revoked. In such circumstances, he prayed for disposal of the writ petition without any interference. 6. We have heard learned senior counsel for the parties and perused the materials on record. 7. Since the validity of the show-cause notice dated August 27, 2019 is under challenge on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the words of eligible duties shall be inserted and shall always be deemed to have been inserted; (b) In the Explanation 1- (i) for the word, brackets and figures sub-sections (3), (4) , the word, brackets and figures sub-sections (1), (3), (4) shall be substituted and shall always be deemed to have been substituted; (ii) clause (iv) shall be omitted and shall always be deemed to have been omitted; (c) in the Explanation 2- (i) for the word, brackets and figure sub-section (5) , the words, brackets and figures sub-sections (1) and (5) shall be substituted and shall always be deemed to have been substituted; (ii) clause (iv) shall be omitted and shall always be deemed to have been omitted; (d) after Explanation 2 as so amended, the following Explanation shall be inserted and shall always be deemed to have been inserted, namely:- Explanation 3.- For removal of doubts, it is hereby clarified that the expression eligible duties and taxes excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appointed day in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act. Explanation . For the purposes of this sub section, the expression unavailed CENVAT credit means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. (3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No.26/2012 Service Tax, dated the 20 th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the existing law, subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day : Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days: Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub section. (6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the appointed day, subject to the following conditions, namely: (i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; (ii) the said registered person is not paying tax under section 10; (iii) the said regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such manner as may be prescribed. Explanation 1. For the purposes of sub sections (3), (4) and (6), the expression eligible duties means (i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (ii) the additional duty leviable under sub section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) (iii) the additional duty leviable under sub section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) (iv) the additional duty of excise leviable under sect ion 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978); (v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the appointed day. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of this sub section, the expression unavailed CENVAT credit means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable pers on under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. (3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No.26/2012 Service Tax, dated the 20 th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi finished or finished good s held in stock on the appointed day, subject to the following conditions, namely: (i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; (ii) the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g shown, be extended by the Commissioner for a further period not exceeding thirty days: Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub section. (6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the appointed day, subject to the following conditions, namely: (i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; (ii) the said registered person is not paying tax under section 10; (iii) the said registered person is eligible for input tax credit on such inputs under this Act; (iv) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of inputs; and (v) such invoices or other prescribed document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) the additional duty leviable under sub section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); (iii) the additional duty leviable under sub section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); (iv) * * * * + (v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and (vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), in respect of inputs held in stock and inputs contained in semi finished or finished goods held in stock on the appointed day. Explanation 2. For the purposes of sub sections (1) and (5) the expression eligible duties and taxes means- (i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (ii) the additional duty leviable under sub section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); (iii) the additional duty leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot included in eligible duties and taxes . As the law now stands, Explanation 3 does not have any application to sub-section (1) of Section 140. The respondent no.3 while issuing the impugned show cause notice perhaps overlooked this aspect and also that, parts of the amendments in Explanations 1 and 2 to Section 140 of the CGST Act sought to be introduced by sub-clauses (1) each of clauses (b) and (c) of Section 28 of the Amending Act are yet to be brought into force. In such view of the matter, a reference to Explanations 1 and 2, as it stands now, may be held to be mindless which, in law, would amount to issuance of a notice without due regard to the provisions of law as well as facts requiring existence or non-existence of a material fact for assumption of jurisdiction. 12. We are conscious of the settled law that the High Court in exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India ought not to interfere with a show-cause notice as a matter of routine or for the mere asking. However, it is only in a case where a show-cause notice is found to be totally non-est in the eyes of law for absolute want of jurisdiction of the authority issui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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