Dept. Erred in Denying ITC Transited From Pre-GST Regime as Section 174(2)(e) Preserves Pre-GST Legal Actions | HC

Case Details: Tripati Ispat Udyog v. State of Jharkhand - [2024] 158 taxmann.com 124 (Jharkhand)

Judiciary and Counsel Details

• • Rongon Mukhopadhyay & Deepak Roshan, JJ.
  • Ms Amrita Sinha, Adv. for the Petitioner.
  • Ashutosh Anand for the Respondent.

Facts of the Case

In the present case, the petitioner was engaged in the business of trading of Iron and Steel within the state of Jharkhand. It filed Form GST TRAN-1 within the prescribed time, transiting an amount of Rs. 26,81,541/- from the JVAT regime to GST regime. The FORM GST TRAN-1 was duly accepted by the GST department and amount was reflected in the electronic credit ledger of the petitioner.

Later, the petitioner received SCN under FORM GST DRC-01 for initiating proceeding u/s 73, 74, 122, 132(1)(d), 132(1)(a) of the CGST Act and it was alleged that the petitioner had not apportioned ITC as per the provisions of section 18(8)(xviii) of the Jharkhand VAT Act and thus not entitled to credit.

The petitioner filed writ petition and contended that initiation of the adjudication proceeding under GST was incorrect and summary notice without the issuance of a detailed SCN was void ab initio.

High Court Held

The Honorable High Court observed that in the case of Usha Martin Limited [2022] 145 taxmann.com 224 (Jhar.), it was held that section 174(2)(e), saves any investigation, inquiry, verification, assessment, adjudication and any other legal proceedings as if these acts have not so amended or repealed.

Therefore, GST authorities were incorrect in assuming jurisdiction and initiating a proceeding under provision of CGST Act by alleging therein that ITC so transited from pre-GST regime was inadmissible under VAT regime.