Mukut House Developers Pvt Ltd Vs Union of India and Others (Punjab & Haryana High Court)
Summary: The Punjab & Haryana High Court allowed the writ petition filed by Mukut House Developers Pvt Ltd, holding that the controversy raised in the petition stood concluded by the judgment of the Division Bench of the Jharkhand High Court in Usha Martin Ltd v. Additional Commissioner, Central GST and Excise Jamshedpur and Others. The petitioner sought final disposal of the writ petition in terms of the judgment passed by the Jharkhand High Court in Usha Martin. The Court recorded that the controversy raised in the present petition stood concluded by that judgment and that the Special Leave Petition against Usha Martin had also been dismissed by the Hon’ble Supreme Court of India on 17.04.2026. In view of the above, the Division Bench comprising the Acting Chief Justice and Justice Rajesh Gaur held that the present petition also deserved to be allowed for the reasons recorded in Usha Martin. Accordingly, the writ petition was allowed in terms of Usha Martin. All pending miscellaneous applications, if any, were also directed to stand disposed of.
The Punjab & Haryana High Court in Mukut House Developers Pvt. Ltd. v. Union of India & Ors., CWP-3682-2026 (O&M), decided on 01.09.2026, has allowed the writ petition concerning invocation of Section 74 of the CGST Act in respect of CENVAT credit pertaining to the erstwhile Service Tax regime and subsequently transitioned into GST.
The controversy before the Court was whether proceedings under the CGST Act could be invoked to determine the admissibility of CENVAT credit originally availed under the pre-GST regime. The Department sought to disallow the transitioned credit under Section 74 of the CGST Act on allegations which essentially related to its admissibility under the erstwhile Service Tax/CENVAT law.
The issue, therefore, went to the very jurisdiction of the GST authorities: whether the admissibility of CENVAT credit under the erstwhile regime could be adjudicated by invoking the machinery provisions of the CGST Act merely because such credit subsequently stood transitioned into GST.
Reliance was placed upon the judgment of the Jharkhand High Court in Usha Martin Ltd. v. Additional Commissioner, Central GST & Excise, Jamshedpur, [2022] 145 taxmann.com 224 (Jharkhand) , decided on 10.11.2022.
In Usha Martin, the Jharkhand High Court had held that the CGST Act deals with input tax credit available under the GST regime and does not confer jurisdiction upon the GST authorities to determine whether CENVAT credit was admissible under the erstwhile law. The Court further recognised that repeal of the erstwhile enactments did not create a vacuum in respect of past transactions and liabilities, as Section 174 of the CGST Act saves proceedings arising under the erstwhile regime.
Thus, where the alleged contravention relates to the Central Excise Act, 1944, Finance Act, 1994 or CENVAT Credit Rules, 2004, the alleged inadmissibility has to be examined under the law governing the relevant period and not by assuming jurisdiction under the CGST Act.
Applying the above principle, the Punjab & Haryana High Court recorded that the controversy in Mukut House Developers Pvt. Ltd. stood concluded by Usha Martin. The Division Bench also took note of the fact that the Special Leave Petition against Usha Martin had been dismissed by the Hon’ble Supreme Court on 17.04.2026.
Accordingly, the Punjab & Haryana High Court allowed the writ petition in terms of Usha Martin.
Conclusion
The decision reiterates an important jurisdictional distinction in cases involving transitional credit. Merely because CENVAT credit pertaining to the pre-GST regime stood transitioned into GST does not confer jurisdiction upon the GST authorities to adjudicate its original admissibility under the erstwhile law.
An alleged violation pertaining to the pre-GST regime must be examined under the law governing that regime.
Cases Discussed / Relied Upon
Usha Martin Ltd v. Additional Commissioner, Central GST and Excise Jamshedpur and Others — The Punjab & Haryana High Court relied upon the judgment of the Jharkhand High Court as concluding the controversy raised in the present writ petition. The judgment is discussed in the TaxGuru case note: Usha Martin Ltd v. Additional Commissioner, Central GST and Excise (Jharkhand High Court).
FULL TEXT OF JUDGMENT OF PUNJAB AND HARYANA HIGH COURT
CM-14854-CWP-2026 (preponement)
1. This application under Section 151 CPC has been filed on behalf of the applicant-petitioner seeking preponement of the date of hearing fixed in the main writ petition.
2. For the reasons mentioned in the application, the same is allowed.
CM-14860-CWP-2026 (disposal)
3. This application under Section 151 CPC has been filed on behalf of the applicant-petitioner for final disposal of the main writ petition in terms of judgment passed by the Jharkhand High Court in Usha Martin Ltd v. Additional Commissioner, Central GST and Excise Jamshedpur and Others, (2024) 124 GSTR 396 (Jharkhand).
4. For the reasons mentioned in the application, the same is allowed.
Main Case (O&M)
5. With the consent of both the parties, main writ petition is taken on board for final disposal today itself.
6. Learned counsel for the petitioner submits that the controversy raised in the present petition stands concluded by the judgment passed by the Division Bench of the Jharkhand High Court in Usha Martin (supra) against which Special Leave Petition (SLP) has also been dismissed by the Hon’ble Supreme Court of India on 17.04.2026.
7. Once that be the position, we are of the view that the present petition also deserves to be allowed for the reasons recorded in Usha Martin (supra).
8. Accordingly, the instant writ petition is allowed in terms of Usha Martin (supra).
9. All pending miscellaneous application(s), if any, shall also stand disposed of.
