TaxTMI 
TaxTMI 
2026 (8) TMI 139
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....s of the case 2.1 The Appellant is, inter alia, engaged in the business of managing and operating an e-commerce platform, viz. TataCliQ.com, which functions through both a mobile application and a website (online platform). The Appellant was duly registered under the service tax regime and was availing CENVAT credit of eligible input services and also ITC of VAT paid on goods were sold on its online platform. 2.2 With the introduction of Goods and Services Tax ("GST") in India with effect from 01.07.2017, the Appellant became entitled to transition the ITC balance reflected in its service tax and VAT returns into the GST regime by filing Form GST TRAN-1, in accordance with Section 140 of the CGST Act read with Rule 117 of the CGST Rules. 2.3 Under the taxation regime prior to introduction of GST i.e. the erstwhile regime, the Appellant had filed its service tax return for the period April 2017 to June 2017 under Section 70 of the Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994. For the period April 2017 to June 2017, vide Notification No. 18/2017-Service Tax dated 22.06.2017, the Appellant was permitted to file its return by 15.08.2017, and such return co....
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....e. 2.9 The aforesaid submissions were not accepted by the Original Authority as well as the 1st Appellate Authority, resulting in confirmation of the demand along with applicable interest and imposition of 100% penalty. Therefore, the present appeal. 3. Grounds of Appeal 3.1 The Appellant has filed the present appeal challenging the order of the 1st Appellate Authority on the following grounds. a) Respondents have travelled beyond the jurisdictional powers assigned under the CGST Act inasmuch as the proceedings are initiated under Section 74(1) of the CGST Act and not under the erstwhile law, as provided under Section 142(6)(a) of the CGST Act. b) There is no contravention of Section 140 of the CGST Act. c) Respondent has erred in holding that the Service tax revised return was filed beyond statutory limit. d) Procedural lapses should not come in way to grant substantial benefit of ITC to the Appellant. e) Verification of invoices not envisaged in law nor is it feasible to corelate closing balance with specific invoices. f) Credit of KKC cannot be denied in view of the judgement of the Hon'ble Bombay High Court in the c....
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....ch as statement, invoice details, challans, payment details and date of availment. f) In respect of the two Google India Pvt. Ltd. invoices, the credit of Rs. 15,69,217 was rightly denied, since one invoice involving Service Tax of Rs. 7,25,996 was not furnished and there was mismatch in invoice dates, and no payment voucher / proof of payment was submitted. g) The proceedings had been validly initiated under Section 74(1) of the CGST Act, since the disputed CENVAT credit had been transitioned through Form GST TRAN-1 and the issue was related to contravention of Section 140 of the CGST Act read with Rule 117 of the CGST Rules. Further, Section 142(6)(a) was inapplicable, and the matter was covered by Section 142(9)(a), Section 174, Rule 121 and Section 160 of the CGST Act / Rules. h) The Appellant failed to furnish documents despite reminders and opportunities, did not comply with its commitment to submit documents by 10.11.2021, and thereby suppressed material facts with intent to transition and utilise inadmissible credit. Thus, invocation of Section 74(1), along with interest under Section 50(3) and penalty under Section 122(2)(b) of the CGST Act is ju....
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.... (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), and the Central Excise Tariff Act, 1985 (5 of 1986) (hereafter referred to as the repealed Acts) are hereby repealed. (2) The repeal of the said Acts and the amendment of the Finance Act, 1994 (32 of 1994) (hereafter referred to as "such amendment" or "amended Act", as the case may be) to the extent mentioned in the sub-section (1) or section 173 shall not- a. ... b. ... c. ... d. ... e. affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, r....
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....40 does not apply to the case of the petitioner at hand. It is neither the allegation against the petitioner that he had not furnished his returns required under the existing law for the period of six months immediately preceding the appointed date as per clause (ii) to the proviso to Section 140. In substance, the contraventions which have been alleged and the proceedings which have been initiated under section 73 (1) of the C.G.S.T. Act are in relation to violation of the C.E.A. and Finance Act read with C.C.R. The gist of the imputation is that the petitioner could not claim the CENVAT credit in lieu of invoices raised by its Bokna mines as both of them were independent entities. Similar was the imputation in respect of the previous show cause notices issued under the existing law which are pending adjudication before the learned CESTAT or the Commissioner (Appeals) for different periods and in some of which the petitioner has already got a stay by the learned CESTAT. Whether the CENVAT credit under the existing law were admissible to be availed and transitioned by the petitioner was not an issue lying within the jurisdiction of the C.G.S.T authorities to be proceeded against an....
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....aw not only in the minds of the law enforcement agencies but also in the common person as to where he stands in the eye of law. If proceedings for transition of CENVAT Credit alleged to be inadmissible is permitted to be carried under the C.G.S.T. Act, it may lead to uncertainty not only in the minds of the ordinary citizen but also in the minds of the Tax authorities. In some cases a jurisdictional proper officer under the C.G.S.T. Act may initiate proceedings under the provisions of the C.G.S.T Act for such contravention. In other cases the competent jurisdictional officer may initiate proceedings under the existing law that is the C.E.A. and Finance Act for the same contravention in view of the repeal and saving provisions under section 174 of the C.G.S.T. Act. Such a course cannot be countenanced in law. As such, we are of the considered view that the initiation of proceedings by respondent no. 1 under section 73 (1) of the C.G.S.T. Act, 2017 for alleged contravention of the C.E.A. and Finance Act, read with C.C.R. against the petitioner by filing TRAN 1 in terms of Section 140 of the C.G.S.T. Act for transition of CENVET Credit as being inadmissible under the existing law was ....
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.... thus: 15. Thus, while answering the question, it has to be considered whether the initiation of proceedings by the respondent no.1 therein under Section 73 of the CGST Act for alleged contravention of the Central Excise Act and Finance Act read with CENVAT Credit Rules against the petitioners therein by filing TRAN 1 in terms of Section 140 of the CGST Act for transition of CENVAT credit as being inadmissible under the existing law or beyond his jurisdiction. Accordingly, the adjudication proceeding, which was impugned in the said writ petition, was quashed. However, the respondent authorities were granted liberty to initiate proceedings under the provisions of the existing law i.e. Central Excise Act, 1944, Finance Act, 1944 read with CENVAT Credit Rules, 2004 against the petitioner therein for the relevant tax period in accordance with law. 16. The expression "in accordance with law" is added with the purpose because the liberty should not be construed to be a liberty de hors the provisions of law. 17. The learned advocate appearing for the appellants submitted that information was sought for under the provisions of the Right to Information Act, 2005 a....
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....sible as ITC under the GST law; or (ii) where the person has not furnished all returns required under the erstwhile law for the period of six months immediately preceding the appointed date, i.e., 01.07.2017; or (iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as may be notified by the Government. 5.15 We find that compliance to conditions (ii) and (iii) above are not in dispute. Insofar as condition (i) is concerned, the lower authorities have sought to examine the correctness and eligibility of the credit availed under the erstwhile law under the guise of the powers conferred upon them under Section 140(1) of the CGST Act. 5.16 We find force in the submission of the Appellant that such an exercise of power is without authority of law and contrary to the ratio of judgements relied upon by them during the hearing before this Tribunal and referred by us supra. 5.17 Revenue in its submissions has merely argued that these judgements are distinguishable on facts without actually bringing out such distinguishing features. 5.18 In our opinion, the lower authorities were not expected to undertake an exa....
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.... under the GST regime. It does not by any stretch of imagination permit the GST officers to carry out assessments of credits claimed under the erstwhile regime. Transition of Krishi Kalyan Cess (KKC) 5.24 With respect to KKC, the Appellant had transitioned the same into the GST regime by filing Form GST TRAN-1. However, due to lack of clarity regarding the availability of ITC in respect of KKC, the Appellant, out of abundant caution, reversed the amount of Rs. 74,67,109 under protest and duly reflected the same in the return for the month of December 2017. 5.25 We find that in light of the judgment of the jurisdictional Hon'ble Bombay High Court in the case of Godrej & Boyce supra, confirmation of demand of transitioned KKC is not sustainable. We reproduce the relevant findings of the Hon'ble Bombay High Court as under: 11. Importantly, Mr. Jetly has not produced any document or material to show that the amendments in Explanations 1 and 2 to Section 140 brought about by Section 28 of the Amending Act have been brought into force. Pertinently, amendment in sub-section (1) of Section 140 has been brought into force by the said notification and the expression 'of....
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....d to the show-cause notice, itself examine the point of lack/want of jurisdiction. If any authority is required, one may profitably refer to the decision of the Supreme Court in Special Director and Anr. v. Mohd. Ghulam Ghouse 2004 (164) E.L.T 141/[2004] 3 SCC 440. 13. Although it is true, as contended by Mr. Jetly, that the respondent no. 3 does not lack the jurisdiction to issue a notice of the nature impugned herein provided the circumstances therefor do exist, the question that has arisen for our consideration is whether issuance of the show-cause notice is vitiated for an approach which is based on an erroneous legal premise. An error in assumption of jurisdiction might also render a notice/an order ultra vires and bad. Perusal of the impugned show-cause notice would reveal assumption of jurisdiction by the respondent no. 3 based on introduction of Explanation 3 to Section 140 of the CGST Act read with Explanations 1 and 2 thereof without showing application of mind as to whether the amended Explanations 1 and 2 have been made operational or not as well as whether Explanation 3 would at all apply to sub-section (1) of Section 140 of the CGST Act. There could have been....
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....Revenue. The respondent also submitted in their written submission filed on 15.07.2026 that the revenue has preferred an Special Leave Petition (C) No. 3226 of 2019 before the Hon'ble Supreme Court against the judgment of Bombay High Court in Godrej & Boyce supra. We are of the firm view that merely because the revenue is before the Hon'ble Supreme Court that can not be sole reason to hold our decision, particularly when the Apex Court has not granted the stay from the operation of the said Bombay High Court judgment. Moreover, our view on the issue of transition of KKC is not only based on the judgment in the case of Godrej & Boyce supra but also on our independent interpretation of the provision and Board's circular dated 02.01.2019. 5.29 Thus, we hold that the transition of Krishi Kalyan Cess by the Appellant is in order. Transitioned ITC of Rs. 22,14,479 under Section 140(6) 5.30 With respect to VAT credit transitioned into the GST regime, the Appellant had provided all the details required to claim VAT credit on Stock-in-Trade goods lying in stock as on 30.06.2017. There is no finding to the contrary to deny this amount of transitioned credit. Without giving any speci....