Case Law Details
Shapoorji Paloonji & Co. Pvt Ltd Vs Union of India (Jharkhand High Court)
The Hon’ble Court issues notice on the challenge to the vires of Rule 118 being contrary to section 142(11)(c) of the CGST Act.
Petitioner is a works contractor. It received advance. It paid service tax on such advances after 01.07.2017. It claimed credit of the same in form Trans-1. Revenue denied and demanded reversal with interest and penalty. Revenue contends that in terms of Rule 118 of the CGST Rules credit can be allowed only of such service tax/VAT paid before 01.07.2022 only.
The Hon’ble Court issues notice on the challenge to the vires of Rule 118 being contrary to section 142(11)(c) of the CGST Act. The petitioner contends no such condition in the statute. The transitional provision is for smooth transition into the new taxation regime and intends to avoid double taxation.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND
Learned counsel for the petitioner submits that intimation in Form GST DRC- 01A has been issued on 19.07.2022 intimating the amount of tax, interest and penalty liable to be paid by the petitioner for transitioning ineligible ITC amounting to Rs.2,72,08,791/- out of total ITC of Rs.3, 62,78,388/- as the amount of rupees two crore seventy two laks and odd was paid after the appointed day i.e. on 11.09.2017. Proceedings under section 74 (1) are contemplated. Petitioner has furnished a reply dated 03.08.2022 (Annexure-19). Learned counsel submits that the provision of rule 118 of the CGST Rules operates in teeth of the provisions of Section 142 (11) (C) of CGST Act, 2017 and to that extent the virus of the rule has been challenged in the writ petition.
2. Learned counsel for the respondent-Union of India and CGST pray for and is allowed four weeks’ time to file counter-affidavit. Counter-affidavit be filed positively by 23.01.2023. Rejoinder, if any, be filed within two weeks, thereafter.
3. Let the matter be listed on 09.02.2023.
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