The court held that the provisions enabling the denial of Input Tax Credit are within jurisdiction, emphasizing the need for statutory adherence in taxation disputes.

JUDGMENT :

RAJA BASU CHOWDHURY, J.

1. Challenging two separate show cause notices both dated 26th July, 2024 issued under Section 74 of the WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), inter alia, including consequential order under Section 73(9) of the said Act dated 14th December, 2024 and 28th October, 2024, the instant writ petition has been filed.

2. The primary contention of the petitioner is that the respondents could not have proceeded to issue show cause so as to deny the availment and/or utilization of Input Tax Credit (ITC) by the petitioner in respect of the purchases made by the petitioner from suppliers whose registration under the said Act has been subsequently cancelled.

3. It is also the petitioner’s contention that the right to avail ITC having been statutorily provided for in Section 16 of the said Act, the show cause notices are primarily without jurisdiction as the same does not identify infraction of any of the provisions contained in Section 16 of the said Act. Since, the show cause is without jurisdiction, the consequential orders passed under Section 74 of the said Act is also bad and consequentially a nullity and should not be acted upon. According to the petitioner, since the aforesaid is a jurisdictional issue, this Court under Article 226 of the Constitution of India is competent to entertain the petition and adjudicate the same on the merits, notwithstanding the presence of alternative remedy. The Counsel would submit that simply because the petitioner has not availed the alternative remedy, the same should not deter this Court to examine whether any case for interference has been made out. In support of his contention he has placed reliance on the judgments delivered by the Hon’ble Supreme Court in the case of Godrej Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority and Others, reported in (2023) SCC Online SC 95. On the same and identical issue and the right of a party to invoke the extra ordinary writ jurisdiction despite presence of alternative remedy, reliance has been placed on the judgment delivered by the Hon’ble Supreme Court in the case of Syed Maqbool Ali v. State of Uttar Pradesh and Another, reported in (2011) 15 SCC 383 While reiterating his contention on the issue as to whether ITC can be denied contrary to the statutory mandate provided for in Section 16 of the said Act, he would submit that a taxing statute is to be strictly construed, in absence of any provisions provided for disallowance of ITC in the manner prescribed by law, no other provisions can be read in the statute so as to deny ITC to the petitioner. In support of the above, he relies on the judgment delivered by the Hon’ble Supreme Court in the case of Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax, reported in (2010) 8 SCC 739 to emphasize that a taxing statute has to be strictly construed.

4. Mr. Dey, learned counsel representing the respondents while objecting to the maintainability of the writ petition on the ground of alternative remedy has drawn the attention of this Court to the provisions of Section 74 of the said Act and would submit that the provisions of Section 74 authorizes the respondents/proper officer not only to embark upon an enquiry but also to determine the liability of the petitioner, if the conditions for invocation of such section are fulfilled. According to him, the petitioner had not challenged the show cause notice previously. The petitioner has also not challenged the invocation of Section 74 of the said Act. Having not done so and having regard to the availability of an efficaci