The main legal point established in the judgment is the violation of principles of natural justice and the disregard of mandatory provisions of the GST Act by the respondent, leading to the quashing of the show cause notice and summary of order.

JUDGMENT :

Deepak Roshan, J.

The instant application has been preferred for the following reliefs:-

(i) For a declaration thereby declaring that input tax credit amounting to Rs.26,62,041.24 availed by the petitioner under the Pre-Goods and Services Tax regime and rolled over to the Goods and Services Tax regime is proper and disallowance of the same by the respondent No.4 is arbitrary, unreasonable, without jurisdisction and violation of Article 14, 19(1)(g) and 300A of the Constitution of India.

(ii) For quashing and setting aside DRC-07 dated 23.08.2018 (Annexure-3) issued by respondent No.4 raising a demand of Rs.35,13,894.43 issued without passing of adjudication order and in violation of Principle of natural justice.

(iii) For a quashing and setting aside show cause notice being reference no.1519 dated 21.07.2018 (Annexure-2) being vague in nature as it does not fulfill the ingredients of proper show cause notice and is issued in excess of its jurisdiction.

(iv) For refund of an amount of Rs.19,08,880/- and/or re-crediting the said amount in Electronic Credit Ledger of the Petitioner.

2. The brief facts of the case as enumerated in this application is that the Petitioner is engaged in the business of trading of Iron and Steel within the state of Jharkhand. For the purpose of said trading the Petitioner purchases Iron and Steel from the market upon payment of tax, being in the nature of Input Tax. As per the provision of the then JVAT Act, the Petitioner was entitled for adjustment of the Input Tax paid by him at the time of purchase of the good from its Output Tax Liability and if any excess claim for Input Tax remains, the same can be carried forward to the subsequent period.

From 1st July, 2017 the Government of India brought all together a new Act governing the tax laws by clubbing the then existing laws. The Jharkhand Goods and Service Tax Act deals with transitional provisions, allowing the dealers to transit the excess Input Tax if any during the VAT regime to the GST regime being Section 140 of the JGST Act subject to the rider that the credit of the value added tax/Input tax be carried forward in the return relating to the period ending with the day immediately preceding the appointed day.

Accordingly, the Petitioner filed its quarterly return (Annexure-1) for the period 01.04.2017 to 30.06.2017 carrying forward excess Input tax amounting to Rs.26,81,541/- to the next period after adjustment from its Output Tax Liability. Pursuant to the provision of Section 140 of the JGST Act read with Rule 117 of the JGST Rules, petitioner filed Form GST TRAN-1 within the prescribed time, transiting an amount of Rs.26,81,541/- from the JVAT regime to GST regime. The said FORM GST TRAN-1 was duly accepted by the Respondent GST department and an amount of Rs.26,81,541/- was reflected in the electronic credit ledger of the Petitioner.

3. Suddenly on 21.07.2018, the Petitioner was in receipt of FORM GST DRC-01 (Annexure-1) being a “Summary of Show Cause Notice” for initiating a proceeding u/s 73, 74, 122, 132(1)(d), 132(1)(a) of the JGST Act read with CGST Act observing therein that the Petitioner has not apportioned Input Tax Credit as per the provisions of section 18(8)(xviii) of the JVAT Act read with Rule 26 of the JVAT Rules, 2006 and notification no. LG35/2015-99, LG35/2015-100, dated 23.09.2015 and thus not entitled for Input Tax Credit.

The case of the petitioner is that from the Summary of Show Cause Notice, it is evident that the same is not in a proper format as the date, time and venue; nothing is mentioned therein, nor the irrelevant sections have been struck down.

4. Soon thereafter, the Petitioner was in receipt of FORM GST DRC-07 “Summary of the Order” dated 23.08.2018 (Annexure-3) imposing tax to the tune of Rs.35,13,894.43 being inclusive of penalty and interest.

Immediately on 16.11.2018, the petitioner applied for the