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of <h1>GST authorities lack jurisdiction over pre-GST transitional credits under Section 174 JGST Act saving provisions</h1> <h3>M/s. Tripati Ispat Udyog Versus State of Jharkhand, The Commissioner of Commercial Taxes, Commercial Taxes Department, Ranchi. Deputy Commissioner of State Taxes, Bokaro, Assistant Commissioner of State Taxes, Bokaro, State Tax Officer, Bokaro</h3> M/s. Tripati Ispat Udyog Versus State of Jharkhand, The Commissioner of Commercial Taxes, Commercial Taxes Department, Ranchi. Deputy Commissioner of ... Issues Involved:1. Legality of disallowance of input tax credit (ITC) transitioned from the pre-GST regime to the GST regime.2. Validity of the show cause notice issued.3. Adherence to principles of natural justice in the adjudication process.Summary:Issue 1: Legality of Disallowance of ITCThe petitioner sought a declaration that the ITC amounting to Rs. 26,62,041.24 transitioned from the pre-GST regime to the GST regime was proper, and its disallowance was arbitrary and without jurisdiction. The court referenced Section 174 of the JGST Act, which deals with repeal and saving provisions, and concluded that the GST authorities were incorrect in assuming jurisdiction to initiate proceedings under the JGST Act for ITC transitioned from the pre-GST regime. The court cited the decision in Usha Martin Limited, which clarified that the repeal of existing laws upon the implementation of the GST regime did not leave a vacuum for past transactions which were not closed.Issue 2: Validity of Show Cause NoticeThe petitioner argued that the entire proceeding was void ab initio as no detailed show cause notice was issued, and only a summary in FORM GST DRC-01 was provided. The court found that the adjudication proceeding initiated without a detailed show cause notice was void ab initio and non-est in law. The court cited the decisions in M/s NKAS Services Private Limited and M/s Godavari Commodities Ltd., which held that adjudication orders passed without issuing proper show cause notices violated the principles of natural justice.Issue 3: Adherence to Principles of Natural JusticeThe petitioner contended that no adjudication order was ever passed, and FORM GST DRC-07 was issued directly, violating the principles of natural justice. The court noted that the respondent authority admitted in their counter affidavit that no adjudication order had been passed. The court emphasized that no opportunity of hearing was granted to the petitioner, violating Section 75(4) of the JGST Act, and thus the entire proceeding was non-est in law.Conclusion:The court allowed the writ application, quashing the impugned show cause notice and the DRC-07 order. The respondents were directed to refund the amount of Rs. 19,08,880/- or re-credit it in the petitioner's Electronic Credit Ledger within ten weeks, along with statutory interest. The respondents were given liberty to reinitiate proceedings if law permits. The writ application was disposed of accordingly.
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