TMI Blog2023 (9) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... r officer in the first instance. Since the impugned show cause notice does not contain any allegations as stated in the counter affidavit filed by the respondents, the proceedings initiated pursuant to the impugned show cause notice cannot cover the said allegations. The impugned show cause notice is liable to be set aside as the same fails to disclose any reason for proposing the recovery and is incapable of eliciting any meaningful response - Petition disposed off. - HON'BLE MR. JUSTICE VIBHU BAKHRU AND HON'BLE MR. JUSTICE AMIT MAHAJAN For the Petitioner Through: Mr. J. K. Mittal, Ms. Vandana Mittal and Ms. Aashna Suri, Advs. For the Respondents Through: Mr. Satyakam, Additional Standing Counsel, Govt. of NCT of Delhi for R-4. VIBHU BAKHRU, J. 1. The petitioner is, essentially, aggrieved by the blocking of its Input Tax Credit (hereafter ITC ). 2. According to the petitioner, it was entitled to avail cumulative ITC amounting to ₹2,30,35,228/- as on 01.07.2017 under the erstwhile Value Added Tax (hereafter VAT ) regime. 3. The petitioner filed the requisite form (GST Tran-I) on 07.10.2017 for transition of the ITC as available under the VAT regime, to the GST regim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te mentioned in table below. You may appear before the undersigned for personal hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below. Please note that besides tax, you are also liable to pay interest and penalty in accordance with the provisions of the Act. If you make payment of tax stated above along with up to date interest within 30 days of the issue of this notice with applicable penalty then proceeding may be deemed to have been concluded. Details of personal hearing etc. Sr. No. Description Particulars 1 Section under which show cause notice/statement is issued 73 2 Date by which reply has to be submitted 30/03/2022 3 Date of personal hearing NA 4 Time of personal hearing NA 5 Venue where personal hearing will be held NA Demand details- Sr. No. Tax Rate (%) Turnover Tax period Act POS (Place of Supply) Tax Interest Penalty Fee Others Total 1 2 3 4 5 6 7 8 9 10 11 12 13 1 0 0.00 JULY 2017 MAR 2018 SGST NA 1,77,81,200.00 0.00 0.00 0.00 0.00 1,77,81,200.00 Total 1,77,81,200.00 0.00 0.00 0.00 0.00 1,77,81,200.00 11. As is apparent from the above that the impugned show cause notice did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off Button then demand is set-off 5. If the taxpayer has already responded to the notices issued earlier by the Proper Officer and the Proper Officer after examining the responses, has come to the conclusion that the unblocking may no longer be required then such blocked credit should be unblocked forthwith. 14. Clearly, the impugned show-cause notice issued to the petitioner cannot be sustained. It does not effectively provide any reasons for raising a demand. The opening sentence of the impugned show-cause notice appears to be a mechanical reproduction of the statutory provision. 15. In so far as the Circular is concerned, the same cannot be read as permitting the proper officer to mechanically create a demand. The proper officer can issue a show cause notice only if he has reasons for raising any demand against the tax payer. The said reason must specifically be stated in the show cause notice. It does, prima facie, appear that the respondent had followed the said Circular in a mechanical manner. 16. Delhi Government, Department of Trade and Taxes had also issued another Circular dated 25.02.2022, which is in somewhat similar terms as the Circular. The said Circular dated 25.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isregard of the provisions of the Act and the Rules. If the impugned instructions are understood to mean that a show cause notice be issued mechanically and a demand be created to appropriate the blocked ITC, the same would be contrary to law. A show cause notice can be issued only if the conditions under section 74 of the CGST Act are satisfied. In case relating to ITC, the show cause notice can be issued only if the proper officer believes that ITC has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax . No show cause notice can be issued without the proper officer forming at least a prima facie view that the tax has not been paid or short paid or erroneously refunded or the ITC had been wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts. ** ** ** ** 37. It is also clear from a plain reading of the impugned instructions that it suggests that the exercise of issuing a show cause notice and creating a demand should be completed before unblocking the ITC notwithstanding that the period of one year has elapsed after the blocking of the ITC. This is contrary to the express ..... X X X X Extracts X X X X X X X X Extracts X X X X
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