Input tax credit show-cause proceedings require statutory adjudication, while interim writ stays exclude the restrained period from limitation.
Section 73 permits proceedings for alleged wrongful availment or utilisation of input tax credit, with entitlement to be adjudicated under Section 75. Audit findings may support initiation, and a show-cause notice does not itself determine liability. Questions concerning invoices, receipt of supplies, banking payments, GSTR-2A reflection, supplier compliance and precedent require determination by the proper officer; the notice therefore remains for statutory adjudication rather than pre-adjudication quashing in writ jurisdiction. Where interim writ protection restrains further proceedings, the period of that restraint is excluded when applying the limitation period, preventing the stay from prejudicing the statutory proceeding. All factual and legal credit defences remain available before the proper officer.
Issues: (i) Whether the show-cause notice under Section 73(1) of the Assam Goods and Services Tax Act, 2017, proposing recovery of input tax credit, was without jurisdiction and liable to be quashed before statutory adjudication; and (ii) Whether the period during which further proceedings remained stayed in the writ petition was liable to be excluded for limitation under Section 73(10) of the Assam Goods and Services Tax Act, 2017.
Issue (i): Whether the show-cause notice under Section 73(1) of the Assam Goods and Services Tax Act, 2017, proposing recovery of input tax credit, was without jurisdiction and liable to be quashed before statutory adjudication.
Analysis: Section 73 authorises initiation of proceedings concerning alleged wrongful availment or utilisation of input tax credit, with the proposed demand to be adjudicated in accordance with Section 75. Possession of invoices, receipt of supplies, payment through banking channels, non-reflection of invoices in GSTR-2A, the supplier's compliance, and the applicability of precedent were matters requiring determination by the proper officer. An audit finding could validly form the basis for initiating proceedings; a show-cause notice is not itself an adjudication. The absence of a counter-affidavit did not convert disputed factual assertions into a basis to decide the entitlement to credit in writ jurisdiction.
Conclusion: The notice was not without jurisdiction and was not liable to be quashed at the pre-adjudication stage. The issue was decided against the assessee.
Issue (ii): Whether the period during which further proceedings remained stayed in the writ petition was liable to be excluded for limitation under Section 73(10) of the Assam Goods and Services Tax Act, 2017.
Analysis: Further statutory proceedings were restrained by the interim protection obtained during the pendency of the writ petition. The time consumed under that protection could not be permitted to prejudice the statutory proceeding.
Conclusion: The direction to exclude the period of pendency of the writ proceeding for limitation purposes was sustained. The issue was decided against the assessee.
Final Conclusion: The proposed input tax credit demand remains subject to statutory adjudication, and all factual and legal defences concerning entitlement to credit may be raised before the proper officer.