# Hcl Infotech Ltd v. Commissioner, Commercial Tax & Anr

- **Citation:** (2024) 9 ILRA 1472
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-09-27
- **Case number:** Writ Tax No. 1396 of 2024
- **Bench:** Shekhar B. Saraf, Manjive Shukla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hcl-infotech-ltd-v-commissioner-commercial-tax-anr-52561
- **Pages:** 11

## Headnote

Law
of
taxation
-
Constitution
of
India,1950 - Article 226 - The Central
Goods
and
Services
Tax
Act,
2017-
Section 61 -Show cause notice under
Section
74
CGST
Act,2017
under
challenge-previous
proceedings
under
Section
73
CGST
Act,2017
already
dropped-no
allegation
of
fraud
or
suppression
of
facts-
notice
lacked
jurisdiction as it did not specify any fraud,
wilful misSt.ment, or suppression of facts,
which are necessary to invoke Section 74show cause notice quashed-possibility of
fresh proceedings allowed if necessary
conditions
are
met-petition
allowed.
(Paras 19, 20, 21, 22, 25,26 and 27)

HELD:
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1473
We take note of the fact that Section 73 of the
CGST Act gives power to the adjudicating
authority to initiate proceedings for recovery of
wrongly availed or utilized Input Tax Credit
along with interest and penalty for any reason
other than the reason of fraud or any wilful misSt.ment or suppression of facts to evade tax. It
is to be taken note of that Section 73 comes
into play in all other circumstances except the
cases where Input Tax Credit has been wrongly
availed or utilized due to fraud or any wilful
misSt.ment or suppression of facts to evade tax.
Thus, from bare reading of Section 73 of the
CGST Act, it becomes crystal clear that if the
proceedings under Section 73 of the CSGT Act
have been finalized, they cannot be reopened
except the case where the Input Tax Credit has
wrongly been availed or utilized due to fraud or
any wilful mis-St.ment or suppression of facts to
evade tax. (Para 21)

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 misSt.ment 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 Tax Credit for any reason other
than fraud or wilful mis-St.ment or suppression
of facts and Section 74 comes into play when
the excessive Input Tax Credit has been availed
due to some fraud or wilful mis-St.ment or
suppression of facts. Thus it is patently manifest
that for deriving the jurisdiction to initiate
proceedings under Section 74 of the CGST Act,
the
adjudicating
authority
must
expressly
mention in the Show Cause Notice that he is
prima-facie satisfied that the person has
wrongly availed or utilized Input Tax Credit due
to some fraud or a wilful mis-St.ment or
suppression of facts to evade tax and that must
be specifically spelled out in the Show Cause
Notice. Once the aforesaid basic ingredient of
the Show Cause Notice under Section 74 of the
CGST Act is missing, the proceedings become
without jurisdiction as the adjudicating authority
derives jurisdiction to proceed under Section 74
of the CGST Act only when the basic ingredients
to proceed under Section 74 are present. (Para
22)

We find that the impugned Show Cause Notice
does not make even a whisper of the fact that
petitioner has wrongly availed or utilized Input
Tax Credit due to any fraud, or wilful misSt.ment or suppression of facts to evade tax
therefore, the proceedings initiated against the
petitioner under Section 74 of the CGST Act are
without jurisdiction for the lack of basic
ingredients required under the said clause. So
far as the argument advanced by the learned
counsel appearing for the respondents that the
writ petition against the Show Cause Notice is
not maintainable, is concerned, we find that it is
consistent view of the Hon'ble Supreme Court
that if the Show Cause Notice is without
jurisdiction, then t

## Text

1472 INDIAN LAW REPORTS ALLAHABAD SERIES

(3) is of unsound mind and stands
so declared by a competent authority; or

(4)
has
been
removed
or
dismissed from the service of the State
Government or Central Government or a
body corporate owned or controlled by
such Government; or

(5) has, in the opinion of the State
Government, such financial or other
interest as is likely to prejudicially affect
his functions as the President or a
member."

4. In the counter affidavit, the ground
for cancellation of the selection of the
petitioner is that the petitioner was an office
bearer of a political party, and therefore, his
working as a Member of the District
Consumer Commission would be prejudiced.
It is to be noted that in the impugned order,
no reason whatsoever was provided and this
explanation has been provided only in the
counter affidavit. Supplanting of reason by
way of a counter affidavit cannot be a
substitute for having providing reasons in the
main order itself. (see: Mohinder Singh Gill
&
another
vs
The
Chief
Election
Commissioner, New Delhi and others,
reported in 1978 (1) SCC 405).

5. In any event, we find that the reason
provided in the counter affidavit is flimsy and
does not fall in any of the clauses for
disqualification as prescribed in Rule 5 of the
Rules. The petitioner has himself informed to
this Court that if he was appointed as a
Member
of
the
District
Consumer
Commission,
he
would
have
given
resignation from the post that he was holding.
Under such circumstances, we find that the
impugned order is without any merit and
deserves to be quashed and set-aside.

6. Accordingly, the impugned order
dated March 1, 2023 and subsequent
communication dated March 14, 2023 are
quashed and set-aside. In the event, there is
any vacancy of the post of Member of the
District
Consumer
Commission,
the
petitioner should be appointed within eight
weeks from date.

7. The writ petition is allowed.
----------
(2024) 9 ILRA 1472
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 27.09.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.
THE HON'BLE MANJIVE SHUKLA, J.

Writ Tax No. 1396 of 2024

Hcl Infotech Ltd. ...Petitioner
Versus
Commissioner, Commercial Tax & Anr.
 ...Respondents

Counsel for the Petitioner:
Atul Gupta

Counsel for the Respondents:
C.S.C.

Law
of
taxation
-
Constitution
of
India,1950 - Article 226 - The Central
Goods
and
Services
Tax
Act,
2017-
Section 61 -Show cause notice under
Section
74
CGST
Act,2017
under
challenge-previous
proceedings
under
Section
73
CGST
Act,2017
already
dropped-no
allegation
of
fraud
or
suppression
of
facts-
notice
lacked
jurisdiction as it did not specify any fraud,
wilful misSt.ment, or suppression of facts,
which are necessary to invoke Section 74show cause notice quashed-possibility of
fresh proceedings allowed if necessary
conditions
are
met-petition
allowed.
(Paras 19, 20, 21, 22, 25,26 and 27)

HELD:
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1473
We take note of the fact that Section 73 of the
CGST Act gives power to the adjudicating
authority to initiate proceedings for recovery of
wrongly availed or utilized Input Tax Credit
along with interest and penalty for any reason
other than the reason of fraud or any wilful misSt.ment or suppression of facts to evade tax. It
is to be taken note of that Section 73 comes
into play in all other circumstances except the
cases where Input Tax Credit has been wrongly
availed or utilized due to fraud or any wilful
misSt.ment or suppression of facts to evade tax.
Thus, from bare reading of Section 73 of the
CGST Act, it becomes crystal clear that if the
proceedings under Section 73 of the CSGT Act
have been finalized, they cannot be reopened
except the case where the Input Tax Credit has
wrongly been availed or utilized due to fraud or
any wilful mis-St.ment or suppression of facts to
evade tax. (Para 21)

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 misSt.ment 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 Tax Credit for any reason other
than fraud or wilful mis-St.ment or suppression
of facts and Section 74 comes into play when
the excessive Input Tax Credit has been availed
due to some fraud or wilful mis-St.ment or
suppression of facts. Thus it is patently manifest
that for deriving the jurisdiction to initiate
proceedings under Section 74 of the CGST Act,
the
adjudicating
authority
must
expressly
mention in the Show Cause Notice that he is
prima-facie satisfied that the person has
wrongly availed or utilized Input Tax Credit due
to some fraud or a wilful mis-St.ment or
suppression of facts to evade tax and that must
be specifically spelled out in the Show Cause
Notice. Once the aforesaid basic ingredient of
the Show Cause Notice under Section 74 of the
CGST Act is missing, the proceedings become
without jurisdiction as the adjudicating authority
derives jurisdiction to proceed under Section 74
of the CGST Act only when the basic ingredients
to proceed under Section 74 are present. (Para
22)

We find that the impugned Show Cause Notice
does not make even a whisper of the fact that
petitioner has wrongly availed or utilized Input
Tax Credit due to any fraud, or wilful misSt.ment or suppression of facts to evade tax
therefore, the proceedings initiated against the
petitioner under Section 74 of the CGST Act are
without jurisdiction for the lack of basic
ingredients required under the said clause. So
far as the argument advanced by the learned
counsel appearing for the respondents that the
writ petition against the Show Cause Notice is
not maintainable, is concerned, we find that it is
consistent view of the Hon'ble Supreme Court
that if the Show Cause Notice is without
jurisdiction, then the same can be challenged by
filing writ petition before the High Court under
Artilce 226 of the Constitution of India. (Para
25)

In the present case, we do not find that the
basic
ingredients
required
for
initiating
proceedings under Section 74 of the CGST Act
are present in the impugned Show Cause Notice
dated 30.12.2023. Therefore, the entire exercise
including the Show Cause Notice is without
jurisdiction and thus this writ petition under
Article 226 of the Constitution of India is
maintainable. (Para 26)

In view of the aforesaid reasons, we are of the
categorical view that the impugned Show Cause
Notice dated 03.08.2024 in its present form
lacks basic ingredients to proceed in the matter
under Section 74 of the CGST Act. Therefore,
the impugned Show Cause Notice dated
03.08.2024 and the entire exercise initiated
pursuant
thereto
is
absolutely
without
jurisdiction and is liable to be quashed. (Para
27)

Petition allowed. (E-13)

List of Cases cited:

1. U.O.I. Vs Hindalco Industries, (2003) 5 SCC
194
1474 INDIAN LAW REPORTS ALLAHABAD SERIES
2. Raj Bahadur Narain Singh Sugar Mills Ltd. Vs
U.O.I., 1996 (88) E.L.T. 24 (S.C.)

3. CCE Vs H.M.M. Ltd., 1995 (76) E.L.T. 497
(S.C.)

(Delivered by Hon'ble Shekhar B. Saraf, J.
&
Hon'ble Manjive Shukla, J.)

1. Heard Sri Atul Gupta, learned
counsel appearing for the petitioner and Sri
Ankur Agarwal, learned Standing Counsel
appearing for the respondents.

2. Petitioner has filed this writ
petition challenging therein the Show
Cause Notice No. ZD090824020702H
dated 03.08.2024 issued by the Deputy
Commissioner,
State
Tax,
Sector-2
NOIDA, U.P. under Section 74 of the
Central Goods and Services Tax Act, 2017
(hereinafter referred to as the 'CGST Act').

3. Facts of the case, in brief, are that
the petitioner is a public limited company
and under the erstwhile regime it had
centralised Service Tax registration in the
State of U.P. and was procuring various
input services to supply the IT services and
had availed CENVAT Credit of the Service
Tax and Cess paid thereon in terms of the
CENVAT Credit Rules, 2004. Thereafter
the Goods and Services Tax (GST) was
introduced w.e.f. 01.07.2017 and for the
purposes of GST petitioner got itself
registered under the new regime vide
GSTIN 09AADCH0305F1Z4. Since on the
appointed date i.e. on 01.07.2017, the
petitioner had unutilized CENVAT Credit
of Service Tax, Education Cess Secondary
& Higher Education Cess and Krishi
Kalyan Cess amounting Rs. 5,47,57,755 as
such said amount was transferred into the
GST regime by filing Form GST TRAN-1
in terms of Section 140 of the CGST Act.

4. The petitioner out of the aforesaid
carried
forward
transitional
credit
transferred the Input Tax Credit amounting
Rs. 3,28,25,979/- under Section 140(8) of
the CGST Act to the persons having same
PAN and registered in the States of
Gujarat, Himachal Pradesh, Karnataka and
Rajasthan therefore, the net transitional
credit remained with the petitioner in State
of Uttar Pradesh amounting to Rs.
2,19,31,776/-. The petitioner in the month
of March, 2018 reversed Rs. 25,31,801/-
pertaining to carried forward credit of
Education Cess, Secondary & Higher
Education Cess and Krishi Kalyan Cess in
GSTR-3B return filed for the month of
March, 2018.

5. The Department issued a notice
under Section 61 of the UPGST Act in
Form GST ASMT-1 bearing reference no.
ZD0904231397471
dated
29.04.2023
whereby the alleged discrepancies in the
returns filed for the FY 2017-18 based on
alleged scrutiny of such returns were
intimated to the petitioner. Petitioner filed
his reply on 05.07.2023 wherein it was
categorically stated that there are no
discrepancies and further clarified that the
transitional credit of Rs. 2,19,31,776 has
been claimed in accordance with provisions
of Section 140(1) and Section 140(9) of the
CGST Act and out of such total transitional
credit, an amount of Rs. 25,31,801/-
pertaining to Cess was already reversed.

6. Thereafter on 30.09.2023 a Show
Cause Notice under Section 73 of the
CGST Act was issued to the petitioner
whereunder for the period from July, 2017
to March, 2018 a demand of Rs.
5,76,12,310/- along with interest and
penalty was proposed. The petitioner
submitted a detailed reply on 18.11.2023 to
the aforesaid Show Cause Notice issued
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1475
under Section 73 of the CGST Act. The
petitioner in its reply submitted that credit
of Rs. 2,19,31,776/- has been claimed
under Section 140(1) and 140(9) of the
CGST Act and further out of such credit of
Rs. 2,19,31,776/- and amount of Rs.
25,31,801/- pertaining to Cess was already
reversed. The petitioner in its reply also
clarified that Section 140(9) allows the
registered person to take credit on the
amount of service tax, which was earlier
reversed
due
to
non-payment
of
consideration,
on
payment
of
the
consideration within a period of three
months from the appointed date.

7. The Deputy Commissioner, State
Tax,
Sector-2
NOIDA,
U.P.
after
considering the reply submitted by the
petitioner and carrying out the verification
of the documents and amounts passed the
adjudication order No. ZD0912236703957
on
30.12.2023
whereby
proceedings
initiated against
the petitioner under
Section 73 of the CGST Act were dropped.

8. The Respondent No. 2 once again
on the same facts has issued Show Cause
Notice to the petitioner on 03.08.2024
under Section 74 of the CGST Act wherein
it has been stated that the CENVAT closing
balance of the petitioner in June 2017 was
Rs. 4,16,00,772/- whereas petitioner had
availed ITC amounting Rs. 5,47,57,755/- as
such petitioner had availed excessive ITC
amounting Rs. 1,31,56,983/-.

9. Learned counsel appearing for the
petitioner has submitted before this Court
that regarding the same issue of claim of
the petitioner for Input Tax Credit earlier
proceedings were drawn by issuing a Show
Cause Notice under Section 73 of the
CGST Act and ultimately Respondent No.
2, on being satisfied with the reply
submitted by the petitioner and after
verification of the documents and amounts,
dropped the proceedings vide order dated
30.12.2023 as such now again the same
issue cannot be reopened by issuing a Show
Cause Notice to the petitioner under
Section 74 of the CGST Act.

10. Learned counsel appearing for the
petitioner has argued that Section 73 and 74
of the CGST Act are independent from
each other and they operate in different
facts and circumstances. In the case of
excessive claimed ITC, the proceedings are
to be drawn under Section 73 of the CGST
Act and once the said proceedings are
concluded, same cannot be reopened. So
far as Section 74 of the CGST Act is
concerned, proceedings can be drawn under
the said section where the adjudicating
authority
has
some
evidence
and
information to make out a reasonable belief
that the excessive ITC has been availed by
reason of fraud or any wilful mis-statement
or suppression of facts to evade Tax.

11. Learned counsel appearing for the
petitioner has further argued that the
adjudicating authority derives jurisdiction
to initiate proceedings under Section 74 of
the CGST Act only after his prima-facie
belief that the assessee has wrongly availed
or utilized ITC by reason of fraud, or any
wilful mis-statement or suppression of
facts. He further submits that Section 74 of
the CGST Act gives extended period of
limitation
to
initiate
proceedings
thereunder, therefore unless in the Show
Cause Notice it is categorically mentioned
that the adjudicating authority has some
information or evidence to make out a
prima-facie belief that the assessee has
wrongly availed or utilized ITC by reason
of fraud, or any wilful mis-statement or
suppression of facts, the proceedings under
1476 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 74 of the CGST Act would be
without jurisdiction and cannot be carried
out.

12. It has been argued on behalf of the
petitioner that for the same amount of Input
Tax Credit availed by the petitioner, once
the proceedings under Section 73 have
been dropped in favour of the petitioner,
same cannot be reopened under Section 74
of the CGST Act by simply stating that the
petitioner had availed excessive Input Tax
Credit.

13. It has also been argued on behalf
of the petitioner that since the Show Cause
Notice issued under Section 74 of the
CGST Act does not contain the essential
ingredients for initiating proceedings under
Section 74 of the CGST Act, as there is no
mention in the impugned Show Cause
Notice that petitioner has wrongly availed
or utilized ITC by reason of fraud, or any
wilful mis-statement or suppression of
facts, the impugned Show Cause Notice
dated 3.8.2024 is absolutely without
jurisdiction.

14. Learned counsel appearing for the
petitioner, to buttress his arguments, has
relied on following judgments rendered by
the Hon'ble Supreme Court:-

(i) Union of India Vs. Hindalco
Industries, (2003) 5 SCC 194.

(ii) Raj Bahadur Narain Singh
Sugar Mills Ltd. Vs. Union of India, 1996
(88) E.L.T. 24 (S.C.)

(iii) CCE Vs. H.M.M. Limited,
1995 (76) E.L.T. 497 (S.C.)

15. Sri Ankur Agarwal, learned
Standing
Counsel
appearing
for
the
respondents has argued that initially
proceedings against the petitioner carried
out under Section 73 of the CGST Act were
dropped and later on, since the adjudicating
authority is of the view that petitioner has
availed or utilized excessive ITC by
suppression of material facts, as such
proceedings under Section 74 of the CGST
Act have been initiated against the
petitioner by issuing impugned Show
Cause Notice dated 3.8.2024.

16.

Learned
Standing
Counsel
appearing for the respondents has also
argued that the petitioner has approached
this Court at the stage of Show Cause
Notice therefore, this writ petition in its
present form is not maintainable and
petitioner may raise all the points before
Respondent No.2 and there the issues
raised by the petitioner shall be considered
in accordance with law.

17.

We
have
considered
the
arguments
advanced
by
the
learned
counsels appearing for the parties.

18. For analysing the arguments
advanced by the learned counsels appearing
for the parties, it would be apt to have a
brief look of Section 73 and 74 of the
CGST Act. Section 73 & 74 of the CGST
Act are delineated below:

"Section 73 of CGST Act, 2017

73. Determination of tax not paid
or short paid or erroneously refunded or
input tax credit wrongly availed or utilised
for any reason other than fraud or any
wilful mis-statement or suppression of
facts.-

(1) Where it appears to the proper
officer that any tax has not been paid or
short paid or erroneously refunded, or
where input tax credit has been wrongly
availed or utilised for any reason, other
than the reason of fraud or any wilful-
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1477
misstatement or suppression of facts to
evade tax, he shall serve notice on the
person chargeable with tax which has not
been so paid or which has been so short
paid or to whom the refund has erroneously
been made, or who has wrongly availed or
utilised input tax credit, requiring him to
show cause as to why he should not pay the
amount specified in the notice along with
interest payable thereon under section 50
and a penalty leviable under the provisions
of this Act or the rules made thereunder.

(2) The proper officer shall issue
the notice under sub-section (1) at least
three months prior to the time limit
specified in sub-section (10) for issuance of
order.

(3) Where a notice has been
issued for any period under sub-section (1),
the proper officer may serve a statement,
containing the details of tax not paid or
short paid or erroneously refunded or input
tax credit wrongly availed or utilised for
such periods other than those covered
under sub-section (1), on the person
chargeable with tax.

(4) The service of such statement
shall be deemed to be service of notice on
such person under sub-section (1), subject
to the condition that the grounds relied
upon for such tax periods other than those
covered under sub-section (1) are the same
as are mentioned in the earlier notice.

(5) The person chargeable with
tax may, before service of notice under
sub-section (1) or, as the case may be, the
statement under sub-section (3), pay the
amount of tax along with interest payable
thereon under section 50 on the basis of his
own ascertainment of such tax or the tax as
ascertained by the proper officer and
inform the proper officer in writing of such
payment.

(6) The proper officer, on receipt
of such information, shall not serve any
notice under sub-section (1) or, as the case
may be, the statement under sub-section
(3), in respect of the tax so paid or any
penalty payable under the provisions of this
Act or the rules made thereunder.

(7) Where the proper officer is of
the opinion that the amount paid under subsection (5) falls short of the amount
actually payable, he shall proceed to issue
the notice as provided for in sub-section (1)
in respect of such amount which falls short
of the amount actually payable.

(8) Where any person chargeable
with tax under sub-section (1) or subsection (3) pays the said tax along with
interest payable under section 50 within
thirty days of issue of show cause notice,
no penalty shall be payable and all
proceedings in respect of the said notice
shall be deemed to be concluded.

(9) The proper officer shall, after
considering the representation, if any, made
by person chargeable with tax, determine
the amount of tax, interest and a penalty
equivalent to ten per cent. of tax or ten
thousand rupees, whichever is higher, due
from such person and issue an order.

(10) The proper officer shall issue
the order under sub-section (9) within three
years from the due date for furnishing of
annual return for the financial year to
which the tax not paid or short paid or input
tax credit wrongly availed or utilised
relates to or within three years from the
date of erroneous refund.

(11) Notwithstanding anything
contained in sub-section (6) or sub-section
(8), penalty under sub-section (9) shall be
payable where any amount of self-assessed
tax or any amount collected as tax has not
been paid within a period of thirty days
from the due date of payment of such tax.

Section 74 of CGST Act, 2017

74. Determination of tax not paid
or short paid or erroneously refunded or
1478 INDIAN LAW REPORTS ALLAHABAD SERIES
input tax credit wrongly availed or utilised
by reason of fraud or any willful-
misstatement or suppression of facts.-

(1) Where it appears to the proper
officer that any tax has not been paid or
short paid or erroneously refunded or
where input tax credit has been wrongly
availed or utilised by reason of fraud, or
any wilful-misstatement or suppression of
facts to evade tax, he shall serve notice on
the person chargeable with tax which has
not been so paid or which has been so short
paid or to whom the refund has erroneously
been made, or who has wrongly availed or
utilised input tax credit, requiring him to
show cause as to why he should not pay the
amount specified in the notice along with
interest payable thereon under section 50
and a penalty equivalent to the tax specified
in the notice.

(2) The proper officer shall issue
the notice under sub-section (1) at least six
months prior to the time limit specified in
sub-section (10) for issuance of order.

(3) Where a notice has been
issued for any period under sub-section (1),
the proper officer may serve a statement,
containing the details of tax not paid or
short paid or erroneously refunded or input
tax credit wrongly availed or utilised for
such periods other than those covered
under sub-section (1), on the person
chargeable with tax.

(4) The service of statement
under sub-section (3) shall be deemed to be
service of notice under sub-section (1) of
section 73, subject to the condition that the
grounds relied upon in the said statement,
except the ground of fraud, or any wilfulmisstatement or suppression of facts to
evade tax, for periods other than those
covered under sub-section (1) are the same
as are mentioned in the earlier notice.

(5) The person chargeable with
tax may, before service of notice under
sub-section (1), pay the amount of tax
along with interest payable under section
50 and a penalty equivalent to fifteen per
cent. of such tax on the basis of his own
ascertainment of such tax or the tax as
ascertained by the proper officer and
inform the proper officer in writing of such
payment.

(6) The proper officer, on receipt
of such information, shall not serve any
notice under sub-section (1), in respect of
the tax so paid or any penalty payable
under the provisions of this Act or the rules
made thereunder.

(7) Where the proper officer is of
the opinion that the amount paid under subsection (5) falls short of the amount
actually payable, he shall proceed to issue
the notice as provided for in sub-section (1)
in respect of such amount which falls short
of the amount actually payable.

(8) Where any person chargeable
with tax under sub-section (1) pays the said
tax along with interest payable under
section 50 and a penalty equivalent to
twenty-five percent. of such tax within
thirty days of issue of the notice, all
proceedings in respect of the said notice
shall be deemed to be concluded.

(9) The proper officer shall, after
considering the representation, if any, made
by the person chargeable with tax,
determine the amount of tax, interest and
penalty equivalent to ten percent of tax or
ten thousand, whichever is higher, due
from such person and issue an order.

(10) The proper officer shall issue
the order under sub-section (9) within a
period of five years from the due date for
furnishing of annual return for the financial
year to which the tax not paid or short paid
or input tax credit wrongly availed or
utilised relates to or within five years from
the date of erroneous refund.
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1479

(11) Where any person served
with an order issued under sub-section (9)
pays the tax along with interest payable
thereon under section 50 and a penalty
equivalent to fifty per cent. of such tax
within thirty days of communication of the
order, all proceedings in respect of the said
notice shall be deemed to be concluded."

19. It has been argued on behalf of the
petitioner that they were having CENVAT
Credit of the Service Tax and Cess
amounting Rs. 5,47,57,755/- in terms of the
CENVAT Credit Rules, 2004 and after the
enforcement
of
GST
regime
w.e.f.
01.07.2017 the aforesaid amount was
transferred Input Tax Credit (ITC) by filing
Form GST TRAN-1 in terms of the Section
140 of the CGST Act. Out of the aforesaid
amount of Rs. 5,47,57,755/- petitioner
availed Input Tax Credit amounting Rs.
3,28,25,979/- and thereafter amount of Rs.
2,19,31,776/- transitional credit remained
balance with the petitioner in State of Uttar
Pradesh. Petitioner also reversed Rs.
25,31,801/- pertaining to carried forward
cess.

20. We find that proceedings under
Section 73 of the CGST Act were initiated
against the petitioner by issuing a Show
Cause Notice on 30.09.2023 whereby
petitioner was required to show cause in
respect of the excessive ITC availed by the
petitioner during the period from July, 2017
to March 2018. Petitioner filed a detailed
reply and after considering the said reply
and verification of the documents and the
amounts, Respondent No. 2 passed order
on 30.12.2023 whereby the proceedings in
respect of excessive ITC availed by the
petitioner, were dropped.

21. We take note of the fact that
Section 73 of the CGST Act gives power to
the
adjudicating
authority
to
initiate
proceedings for recovery of wrongly
availed or utilized Input Tax Credit along
with interest and penalty for any reason
other than the reason of fraud or any wilful
mis-statement or suppression of facts to
evade tax. It is to be taken note of that
Section 73 comes into play in all other
circumstances except the cases where Input
Tax Credit has been wrongly availed or
utilized due to fraud or any wilful misstatement or suppression of facts to evade
tax. Thus from bare reading of Section 73
of the CGST Act, it becomes crystal clear
that if the proceedings under Section 73 of
the CSGT Act have been finalized, they
cannot be reopened except the case where
the Input Tax Credit has wrongly been
availed or utilized due to fraud or any
wilful mis-statement or suppression of facts
to evade tax.

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 Tax Credit for any reason
other than fraud or wilful mis-statement or
suppression of facts and Section 74 comes
into play when the excessive Input Tax
Credit has been availed due to some fraud
or wilful mis-statement or suppression of
facts. Thus it is patently manifest that for
1480 INDIAN LAW REPORTS ALLAHABAD SERIES
deriving
the
jurisdiction
to
initiate
proceedings under Section 74 of the CGST
Act,
the
adjudicating
authority
must
expressly mention in the Show Cause
Notice that he is prima-facie satisfied that
the person has wrongly availed or utilized
Input Tax Credit due to some fraud or a
wilful mis-statement or suppression of facts
to evade tax and that must be specifically
spelled out in the Show Cause Notice.
Once the aforesaid basic ingredient of the
Show Cause Notice under Section 74 of the
CGST Act is missing, the proceedings
becomes
without
jurisdiction
as
the
adjudicating authority derives jurisdiction
to proceed under Section 74 of the CGST
Act only when the basic ingredients to
proceed under Section 74 are present.

23. The Hon'ble Supreme Court in
the case of Raj Bahadur Narain Singh
Sugar Mills Ltd. Vs. Union of India,
reported in 1996 (88) E.L.T. 24 (S.C.) has
held as follows:-

"9. We have set out the relevant
parts of the show cause notice. It speaks of
an erroneously granted rebate. There is no
mention in it of any collusion, wilful misstatement or suppression of fact by the
appellants for the purposes of availing of
the larger period of five years for the
issuance of a notice under Rule 10. The
party to whom a show cause notice under
Rule 10 is issued must be made aware that
the allegation against him is of collusion or
wilful misstatement or suppression of fact.
This is a requirement of natural justice. It is
also the law, laid down by this Court in
Collector of Central Excise v. H.M.M.
Limited - 1995 (76) E.L.T. 497. It has been
said there with reference to Section 11A of
the Central Excises and Salt Act, 1944,
which replaced Rule 10, that if the
authorities propose to invoke the proviso to
Section 11A(1), the show cause notice must
put the assessee to notice which of the
various commissions and omissions stated
in the proviso is committed to extend the
period from six months to five years.
Unless the assessee is put to notice, the
assessee would have no opportunity to
meet the case of the authorities. The
defaults enumerated in the proviso were
more than one and if the authorities 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 Vs. H.M.M. Limited,
reported in 1995 (76) E.L.T. 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 subsection (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 or
wilful misstatement or suppression of fact
or contravention of any provision of the
Act or of the Rules made thereunder with
9 All. Hcl Infotech Ltd. Vs. Commissioner, Commercial Tax & Anr.
1481
intent to evade payment of duty. In that
case the period of six months would stand
extended to 5 years are provided by the
said proviso. Therefore, in order to attract
the proviso to Section 11A (1) it must be
alleged in the show cause notice that the
duty of excise had not been levied or paid
by reason of fraud, collusion or wilful
misstatement or suppression of fact on the
part of the assessee or by reason of
contravention of any of the provisions of
the Act or of the Rules made thereunder
with intent to evade payment of duties by
such person or his agent. There is no such
averment to be found in the show cause
notice. There is no averment that the duty
of excise had been intentionally evaded or
that fraud or collusion had been noticed or
that the assessee was a guilty or wilful
misstatement or suppression of fact. In the
absence of such averments in the show
cause notice it is difficult to understand
how the Revenue could sustain the notice
under the proviso to Section 11A(1) of the
Act. The Additional Collector while
conceding that the notice had been issued
after the period of six months prescribed in
Section 11A(1) of the Act had proceeded to
observe that there was wilful action of
withholding of vital information apparently
for evasion of excise duty due on this
waste/by-product but counsel for the
assessee contended that in the absence of
any such allegation in the show cause
notice the assessee was not put to notice
regarding the specific allegation under the
proviso to that sub-section. The mere nondeclaration of the waste/by-product in their
classification list cannot establish any
wilful withholding of vital information for
the purpose of evasion of excise duty due
on the said product. There could be,
counsel contended, bona fide belief on the
part of the assessee that the said waste or
by-product did not attract excise duty and
hence it may not have been included in
their classification list. But that per se
cannot go to prove that there was the
intention to evade payment of duty or that
the assessee was guilty o f fraud,
collusion, misconduct or suppression to
attract the proviso to Section 11A(1) of the
Act. There is considerable force in this
contention. If the Department proposes to
invoke the proviso to Section 11A(1), 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 Show
Cause Notice does not make even a
whisper of the fact that petitioner has
wrongly availed or utilized Input Tax
Credit due to any fraud, or wilful misstatement or suppression of facts to evade
1482 INDIAN LAW REPORTS ALLAHABAD SERIES
tax therefore, the proceedings initiated
against the petitioner under Section 74 of
the CGST Act are without jurisdiction for
the lack of basic ingredients required under
the said clause. So far as the argument
advanced by the learned counsel appearing
for the respondents that the writ petition
against the Show Cause Notice is not
maintainable, is concerned, we find that it
is consistent view of the Hon'ble Supreme
Court that if the Show Cause Notice is
without jurisdiction then the same can be
challenged by filing writ petition before the
High Court under Artilce 226 of the
Constitution of India.

26. In the present case, we do not find
that the basic ingredients required for
initiating proceedings under Section 74 of
the CGST Act are present in the impugned
Show Cause Notice dated 30.12.2023.
Therefore the entire exercise including the
Show Cause Notice is without jurisdiction
and thus this writ petition under Article 226
of the Constitution of India is maintainable.

27. In view of the aforesaid reasons,
we are of the categorical view that the
impugned Show Cause Notice dated
03.08.2024 in its present form lacks basic
ingredients to proceed in the matter under
Section 74 of the CGST Act. Therefore, the
impugned Show Cause Notice dated
03.08.2024 and the entire exercise initiated
pursuant thereto is absolutely without
jurisdiction and is liable to be quashed.

28. Accordingly, this writ petition is
allowed. The Show Cause Notice dated
03.08.2024 is quashed leaving it open for
Respondent
No.
2
to
initiate
fresh
proceedings under Section 74 of the CGST
Act against the petitioner by issuing a fresh
Show Cause Notice containing the basic
ingredients regarding fraud or wilful misstatement or suppression of facts to evade
tax, if they so exist.
----------
(2024) 9 ILRA 1482
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.09.2024

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ A No. 21492 of 2023
connected with other cases

Vinod Kumar Srivastava ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner
Avdhesh Narayan Tiwari, Shivendu Ojha,
Sr. Advocate

Counsel for the Respondents:
C.S.C.

A. Service Law - Salary - U.P. Secondary
Education Service Selection Board, 1982 -
Sections 18 & 33G(8) - The U.P. Secondary
Education Services Commission (Removal
of Difficulties) (Second) Order, 1981 - The
action of St. terminating services and
stopping
salary
on
09.11.2023
was
against the statutory provisions as well as
the dictum of Hon'ble Apex Court. The GO
of 09.11.2023 had created the entire chaos in
the St. of U.P. as far as regularization of
candidates appointed prior to 30.12.2000. (Para
29)

In the St. ad hocism has been going on for last
40 years in the aided Institutions. The
Government from time to time had inserted
various provisions in the Act of 1982 for
regularising the services of teachers who were
appointed either on ad hoc basis or against a
short term vacancy. The candidates had been
litigating the matter before this Court either for
getting their salary post appointment, or for
getting their services regularised. Many of the