GST Input Tax Credit Dispute: Unauthorized Migration Challenge Halts Proceedings with Interim Relief for Petitioner

Delhi HC temporarily stayed proceedings on a Show Cause Notice alleging wrongful input tax credit. The petitioner challenged unauthorized GST migration using their DVAT registration, claiming no migration application was submitted. Respondent sought additional time to gather documents, and the court scheduled the next hearing for 21.02.2024, granting interim relief to the petitioner.

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Issues involved: Impugning a Show Cause Notice alleging wrongful input tax credit availed by the petitioner under the DVAT Act prior to the enactment of the CGST Act.

Summary:
The petitioner challenged a Show Cause Notice dated 27.02.2023, accusing them of availing wrongful input tax credit. The petitioner, registered under the DVAT Act before the CGST Act, claimed to have never applied for migration to the GST Scheme but found that someone misused their credentials for this purpose. The respondents identified individuals who allegedly used the petitioner's DVAT Registration for GST migration, despite the petitioner's registration cancellation on 01.04.2017.

The petitioner's counsel argued that no application for migration was made, and the dealer profile confirmed the lack of such an application. Respondent No.3 sought additional time to gather relevant information and documents regarding the alleged migration from DVAT to the GST Scheme. The court granted the request and scheduled the next hearing for 21.02.2024, with proceedings on the Show Cause Notice temporarily stayed.

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