TaxTMI 
TaxTMI 
2026 (2) TMI 1387
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.... of notice of rule on behalf of the respondent. 2. On 06.02.2026, following order was passed: "It is noticed by us that the respondent has issued show cause notice under Section 74(1) of the Goods and Services Tax Act, 2017 (For Short "GST Act") dated 28.10.2025 is without jurisdiction and in fact the respondent authority has misinterpreted the provisions of Sections 17(5) (d) of the GST Act. Learned Standing Counsel Mr. Deepak Khanchandani for the respondent requests for some time in order to take instructions. List the matter on 10.02.2026. To be listed on top of the Board." 3. By this writ petition, the petitioner has assailed the show-cause notice dated 28.10.2025 under Section 74(1) of the Goods and Ser....
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....n July 2022 and Rs. 16,51,00,000/- in September 2022. Accordingly, the Petitioner discharged GST liability of Rs. 3.60 crores in July 2022 and Rs. 2.97 crores in September 2022. While discharging GST for July 2022, the Petitioner inadvertently availed and utilized ITC of Rs. 38,60,608/-, which was subsequently reversed through Form DRC-03 dated 11.04.2023. 4.4 It appears that the respondent department sought for certain information by alleging that the petitioner had filed NIL returns for Financial Year (F.Y) 2022-23 and F.Y. 2023-24 except for July, 2022 and September, 2022 and had availed ITC on invoices issued by GIDC, which was purportedly in the nature of blocked credit under Section 17(5)(d) of the GST Act. Accordingly, a spot visi....
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....arge levied by GIDC, the credit thereof has never been utilised for payment of output GST and still continues to remain unutilised in the electronic credit ledger and the respondent has blocked the very same amount lying in the petitioner's electronic credit ledger on 22.09.2025, which clearly established that the credit was lying unutilised as on that date. 5.2 It is further submitted that two sub-plots in question were sold during the F.Y. 2022-23, well before the date on which the ITC was blocked, which would further confirm that the credit could not have been utilised for any output tax liability. It is submitted that the entire GST on the transfer of sub-plots has been discharged in cash and even the ITC of Rs. 38,60,608/- which was....
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....siness activities of acquiring the leasehold rights over the GIDC Plots from one Syngenta India Limited and further undertaking sub-plotting activities and subsequently transferring the leasehold rights of such subplots to various purchasers. The petitioner is a Non-Resident Indian (NRI) residing in the USA and has obtained GST Registration solely for the purpose of discharging GST liability on the transfer of leasehold rights of GIDC sub-plots. 8. The petitioner has been issued notice under Section 74(1) of the GST Act in Form DRC-01A on 13.10.2025 calling upon him to pay Rs. 98,11,678/- along with applicable interest and penalty for alleging that he had availed and utilised ITC in contravention of Section 17(5)(d) of the GST Act. 9.....
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....nd machinery". 10. Thus, a plain and simple reading of provision of Section 17(5)(d) of the GST Act exposits that the apportionment of credit and blocked credit relates to the goods or services or both by a taxable person for the purpose of construction of any immovable property. Thus, the legislative intent is clear that the bar on credit applied exclusively to construction related expenditure and the apportionment of credit and blocked credits relating to such business. The respondent has not established that the petitioner has undertaken any construction activity whatsoever and apart from transferring the leasehold rights in GIDC Plot, is also accordingly, undertaking the construction activities. Thus, the provision of Section 17(5)(d....
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....er document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer." 11. Thus, we do not find that in the instant case, there is any fraud or wilful mis-statement or any suppression of facts at the end of the petitioner in availing the ITC or the same is wrongly availed. On the contrary, it has not been denied by the respondent that, the petitioner had, though utilised the ITC of Rs. 38,60,608/- in the month of July, 2022 but accordingly he has reversed to Form DRC-03 dated 11.04.2023. Thus, the petitioner has paid the entire output of GST liability in cash. Hence, the question of resorting to Section 74 of the GST Act is also uncalled for. On bot....