TaxTMI 
TaxTMI 
2025 (3) TMI 1236
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.... (iii) Direct the Respondents to refrain from initiating any further action/recovery proceedings against the Petitioner in respect of the refund granted for the relevant period; (iv) In the interim, to keep the proceedings initiated vide the Impugned Demand-cum-Show Cause Notice No. 13/2023-24 dated August 03, 2024, in abeyance till the disposal of the present petition; (v) To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice; (vi) To award costs of and incidental to this application be paid by the Respondent; (vii) Pass any other order(s) as this Hon'ble Court may deem fit and more appropriate in order to grant relief to the Petitioner." 2. We had, in our order dated 07 October 2024, flagged the principal issue which arises in the following words: "1. Prima facie and on hearing learned counsels for parties, we find ourselves unable to sustain the impugned Show Cause Notice ["SCN"] bearing in mind the Order-in-Appeal dated 09 March 2021 and which has at least, subject to whatever orders that may be pas....
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....ay. 10. It is clarified that this would not preclude the respondents from availing the remedies as available in law. 11. Needless to say, if the Revenue prevails in upsetting the Order-in-Appeal dated 09.03.2021, it would also be entitled to recover the amount as disbursed." 4. Bearing in mind the above, we have no doubt that the respondents were liable to disburse the refund pursuant to the Order-in-Appeal dated 09 March 2021 for the tax period of October 2017 to March 2018. Subsequently, and by virtue of an order dated 25/26 July 2023, the respondent sanctioned the refund in terms of the aforenoted orders. 5. However, by way of the impugned Show Cause Notice SCN dated 03 August 2024, and which takes note of the earlier proceedings that had culminated in the Order-in-Appeal dated 09 March 2021 as well as the claim for refund flowing therefrom coming to be affirmed by this Court, the respondents have once again initiated proceedings for the same tax period of October 2017 to March 2018. 6. It becomes relevant to note that the SCN issued under Section 74 of the Central Goods and Services Tax Act, 2017 Act fails to lay in place any clear allegations of coll....
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....2017, therefore the taxpayer was not eligible for claiming refund of accumulated ITC under Section 54. In the regime of self-assessment and voluntary compliance, the onus is on the taxpayer to declare the nature of its supply and transactions truthfully. In the instant case, it appears that the taxpayer has misstated facts and suppressed facts from the department to claim refund of accumulated ITC by treating the supplies made as export. It appears from the discussion above that as per the service agreement, the Place of supply is in India and the nature of supply is of intermediary services and not export. However, the taxpayer declared the supply as export and filed refund under Section 54 of CGST Act. As mentioned above, the refund was initially rejected vide Order dated 22.05.2019. However, in pursuance of High Court Order following the Writ Petition filed by the taxpayer, the refund was sanctioned vide Order dated 26.07.2023. From the above, it appears that the refund sanctioned to the claimant is erroneous and liable to recovered by invoking Section 74. In the present case, it therefore, appears that Refund application filed by the assessee vide ARN....
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....antation of the language employed by that section. It would ultimately have to be tested on facts which are found or discovered by the respondents and which would be demonstrative of the charge which is laid. 10. The Court in Parity Infotech had found that the SCN merely reproduced the statutory language of Section 74 without any tangible material or independent reasoning to support the allegation of fraud or misstatement. Consequently, the SCN was held to have been issued mechanically and thus the invocation of Section 74 being wholly unwarranted. This becomes evident from the following observations appearing therein: "22. Notwithstanding that Respondent 4 had no information as to any offending transaction, it issued the impugned show-cause notice under Section 74 of the CGST Act, asserting as under: "It has come to my notice that tax due has not been paid or short-paid or refund has been released erroneously or input tax credit has been wrongly availed or utilised by you or the amount paid by you through the above referred application for intimation of voluntary payment for the reasons and other details mentioned in annexure for the aforesaid tax period." ....
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.... authority of law." 11. The Allahabad High Court has, in HCL Infotech Ltd. v. CCT 2024 SCC OnLine All 5769, further clarified that in order to invoke the extended time period of five years under Section 74 of the Act, the SCN must clearly set out the specific acts of commission or omission on the basis of which an opinion may be formed that benefits had been claimed "by reason of" fraud, misstatement or suppression of facts. We deem it appropriate to extract the following passages from that decision: "22. We find that proceedings initiated against the petitioner for availing or utilizing the excessive ITC have already been finalized by the Respondent No. 2 and the proceedings were dropped vide order dated 30.12.2023 therefore, the said proceedings could have been reopened under Section 74 of the CGST Act only if the adjudicating authority was prima facie satisfied that the petitioner has availed or utilized Input Tax Credit due to any fraud or any wilful mis-statement or suppression of facts to evade tax. The field of operation of Section 73 and 74 of the CGST Act is altogether different i.e. Section 73 operates in all other cases of wrongly availed or utilized Input Ta....
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....rities placed reliance on the proviso, it had to be specifically stated in the show cause notice which was the allegation against the assessee falling within the four corners of the said proviso." 24. The Hon'ble Supreme Court in the case of CCE v. H.M.M. Limited, (1995) 76 ELT 497 (S.C.) has held as follows:- "2. The assessee contended before the Additional Collector of Central Excise that the show cause notice was time barred under the main part of Section 11A since it was issued after the expiry of the period of six months stipulated therein but the Additional Collector sustained the notice on the ground that it was within five years impliedly holding that the purported action was under the proviso to Section 11A of the Act. There is no dispute that the show cause notice cannot be sustained under sub-section (1) of Section 11A unless the proviso is attracted. Admittedly, it is beyond the period of limitation of six months prescribed under Section 11A(1) but it is within the extended period of 5 years under the proviso to that sub-section. Now in order to attract the proviso it must be shown that the excise duty escaped payment by reason of fraud, collusion ....
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....), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The de-faults enumerated in the proviso to the said sub-section are more than one and if theexcise department places reliance on the proviso it must be specifically stated in the show cause notice which is the allegation against the assessee falling within the four comers of the said proviso. In the instant case that having not been specifically stated the Additional Collector was not justified in inferring (merely because the assessee had failed to make a declaration in regard to waste or by-product) an intention to evade the payment of duty. The Additional Collector did not specifically deal with this contention of the assessee but merely drew the inference that since the classification list did not make any mention in regard to this waste product it could be inferred that the assessee had apparently tried to evade the payment of excise duty." 25. We find that the impugned Sho....