Hcl Infotech Ltd v. Commissioner, Commercial Tax And Another

Case snapshot

Sections / provisions: GST statutory provision - Section 11A; GST statutory provision - Section 11A(1); GST statutory provision - Section 50; GST statutory provision - Section 61; GST statutory provision - Section 73; GST statutory provision - Section 74; GST statutory provision - Section 140; GST statutory provision - Section 140(1); GST statutory provision - Section 140(8); GST statutory provision - Section 140(9)

Questions before the Court / Tribunal

• Issue and context: 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’). Operative disposition: 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 mis-statement or suppression of facts to evade tax, if they so exist. Order Date :- 27.09.2024 Gaurav (Manjive Shukla, J.) (Shekhar B. Saraf,
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

A.F.R. Neutral Citation No. - 2024:AHC:158274-DB Reserved Court No. - 40 Case :- WRIT TAX No. - 1396 of 2024 Petitioner :- Hcl Infotech Ltd Respondent :- Commissioner, Commercial Tax And Another Counsel for Petitioner :- Atul Gupta Counsel for Respondent :- C.S.C. 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 CENV AT Credit of the Service Tax and Cess paid thereon in terms of the CENV AT 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 CENV AT Credit of

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 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 nonpayment 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 CENV AT 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.

Appellant / petitioner / assessee submissions

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 misstatement 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 Section 74 of the CGST Act would be without jurisdiction and cannot be carried out.

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.

Revenue / respondent submissions

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

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 mis-statement 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.

Court / Tribunal analysis and reasoning

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.

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.

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.

or of the Rules made thereunder with 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.

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.

Operative decision and relief

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

Ratio and legal principle

The narrow proposition associated with Hcl Infotech Ltd v. Commissioner, Commercial Tax And Another concerns issue and context: 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’). operative disposition: 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 mis-statement or suppression of facts to evade tax, if they so exist. order date :- 27.09.2024 gaurav (manjive shukla, j.) (shekhar b. saraf, The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in WRIT TAX No. - 1396 of 2024.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Allowed / set aside” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: Issue and context: 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’). Operative disposition: 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 mis-statement or suppression of facts to evade tax, if they so exist. Order Date :- 27.09.2024 Gaurav (Manjive Shukla, J.) (Shekhar B. Saraf, Its practical value lies in the way the Allahabad High Court connected the governing provisions—GST statutory provision - Section 11A; GST statutory provision - Section 11A(1); GST statutory provision - Section 50; GST statutory provision - Section 61; GST statutory provision - Section 73; GST statutory provision - Section 74; GST statutory provision - Section 140; GST statutory provision - Section 140(1); GST statutory provision - Section 140(8); GST statutory provision - Section 140(9)—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of GST statutory provision - Section 11A; GST statutory provision - Section 11A(1); GST statutory provision - Section 50; GST statutory provision - Section 61; GST statutory provision - Section 73; GST statutory provision - Section 74; GST statutory provision - Section 140; GST statutory provision - Section 140(1); GST statutory provision - Section 140(8); GST statutory provision - Section 140(9) and the decision date 2024-09-27; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is Hcl Infotech Ltd v. Commissioner, Commercial Tax And Another, the proceeding is WRIT TAX No. - 1396 of 2024, and the decision is dated 2024-09-27. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as Shekhar B. Saraf,J.; Manjive Shukla,J.. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with GST statutory provision - Section 11A; GST statutory provision - Section 11A(1); GST statutory provision - Section 50; GST statutory provision - Section 61; GST statutory provision - Section 73; GST statutory provision - Section 74; GST statutory provision - Section 140; GST statutory provision - Section 140(1); GST statutory provision - Section 140(8); GST statutory provision - Section 140(9). The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Allowed / set aside. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_SUBSEQUENT_TREATMENT_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• GST statutory provision - Section 11A — apply the exact version considered in the judgment.
• GST statutory provision - Section 11A(1) — apply the exact version considered in the judgment.
• GST statutory provision - Section 50 — apply the exact version considered in the judgment.
• GST statutory provision - Section 61 — apply the exact version considered in the judgment.
• GST statutory provision - Section 73 — apply the exact version considered in the judgment.
• GST statutory provision - Section 74 — apply the exact version considered in the judgment.
• GST statutory provision - Section 140 — apply the exact version considered in the judgment.
• GST statutory provision - Section 140(1) — apply the exact version considered in the judgment.
• GST statutory provision - Section 140(8) — apply the exact version considered in the judgment.
• GST statutory provision - Section 140(9) — apply the exact version considered in the judgment.

Case network

• Mohd. Akib v. Union of India and Others — Allahabad High Court · Allowed / set aside
• M/s Betterbot Tech Services Private Limited v. Union of India and Others — Allahabad High Court · Allowed / set aside
• Sun International Limited v. Commissioner of Delhi Goods and Services Tax and Another — Delhi High Court · Allowed / set aside
• Sandeep Singhal v. Directorate General of GST Intelligence and Others — Allahabad High Court · Allowed / set aside

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