2025 (9) TMI 1333

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....ent of the learned counsel for the parties. 3. The Petitioner challenges the orders dated 02 July 2025 for the restriction of use of fraudulent ITC under Rule 86-A(2) of the CGST/MGST Rules. These orders are at Exhibits F and G to the Petition. 4. Before the impugned orders were issued, the department addressed notices dated 30 June 2025 to the Petitioner, which are at Exhibits B and C. Mr Pathak contends that these are the show cause notices as to why the powers under Rule 86-A should not be exercised. 5. Ms Vyas, however, contends that these were not show-cause notices but were only intimations regarding the proposal to exercise powers under Rule 86 (A) of the MGST Rules. 6. The last paragraph of the notices dated 30 June 2025....

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....orsement on the copy of the reply at Exhibit-D to this Petition. 9. However, the impugned orders were made on 02 July 2025 without even waiting for the time limit indicated in the notices dated 30 June 2025 to expire. The Petitioner's reply filed on 03 July 2025, i.e., within the time limit allowed by the notices dated 30 June 2025, was completely ignored. 10. Ms. Vyas tried to contend that no show-cause notice is contemplated before the exercise of powers under Rule 86-A of the MGST Rules, 2017. At this stage, we do not propose to go into this issue because this is a case where the department deemed it appropriate to issue the notices dated 30 June 2025, which, in our judgment, were nothing but show-cause notices. Having done this, t....

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.... of natural justice, we clarify that the department would now be at liberty to dispose of the show-cause notices dated 30 June 2025 after considering the Petitioner's reply dated 02 July 2025 and hearing the representative of the Petitioner by 10 October 2025, at the latest. 14. The above time limit is imposed because Mr. Pathak, based on instructions from the Petitioner, now makes a statement before us that even upon the restoration of the credit into the Petitioner's electronic credit ledger, until the department disposes of the show-cause notices dated 30 June 2025, the Petitioner shall not utilise any credit from its electronic credit ledger. This statement is accepted, and the Petitioner is directed to act accordingly. 15. Howeve....