IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 18068 of 2025 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI ==========================================================

Approved for Reporting Yes No ✔

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NIKET BIPINBHAI PATEL THROUGH POWER OF ATTORNEY HOLDER BIPINBHAI MADHAVBHAI PATEL Versus ASSISTANT COMMISSIONER (A.E.) CGST-CENTRAL EXCISE VADODARA-II COMMISSIONERATE ==========================================================

Appearance:

MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1 DEEPAK N KHANCHANDANI(7781) for the Respondent(s) No. 1 ==========================================================

CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 10/02/2026

ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. Rule returnable forthwith. Mr. Deepak Khanchandani, learned advocate waives service of notice of rule on behalf of the respondent.

2. On 06.02.2026, following order was passed:

“It is noticed by us that the respondent has issued show cause notice under Section 74(1) of the Goods and Services Tax Act, 2017 (For Short “GST Act”) dated 28.10.2025 is without jurisdiction and in fact the respondent authority has misinterpreted the provisions of Sections 17(5) (d) of the GST Act.

Learned Standing Counsel Mr. Deepak Khanchandani for the respondent requests for some time in order to take instructions.

List the matter on 10.02.2026. To be listed on top of the Board.”

3. By this writ petition, the petitioner has assailed the show-cause notice dated 28.10.2025 under Section 74(1) of the Goods and Services Tax Act, 2017 (for short “GST Act”). Further prayer is made seeking direction to the respondent to unblock the Input Tax Credit (for short “ITC”) amounting to Rs.98,11,678/-.

4. The brief facts of the writ petition are as under:

4.1 Petitioner is an individual who has acquired leasehold rights over a Gujarat Industrial Development Corporation (GIDC), Ankleshwar plot from Syngenta India Limited and is engaged in the business of undertaking sub-plotting activities and subsequently transferring the leasehold rights of such sub-plots to various purchasers. Petitioner is a Non-Resident Indian (NRI) residing in the USA and has obtained GST registration being GSTIN 24BGDPP4059A1ZR w.e.f. 14.03.2022 solely for the purpose of discharging GST liability on the transfer of leasehold rights of GIDC sub-plots.

4.2 For transferring the leasehold rights of the sub-plots, the Petitioner is required to pay various charges to GIDC, such as sub-divisional charges, NU penalty, miscellaneous administrative charges, transfer fees and other statutory dues necessary for effecting the transfer. GIDC levies GST on these charges, and since such expenses are directly and intrinsically linked to the Petitioner's business activities, the Petitioner has duly availed the corresponding Input Tax Credit (ITC).

4.3 During F.Y. 2022-23, the Petitioner sold Plot Nos. 629/2 and 629/4 to M/s SML Limited. Against these transactions, the Petitioner received consideration of Rs. 20,00,00,000/- in July 2022 and Rs. 16,51,00,000/- in September 2022. Accordingly, the Petitioner discharged GST liability of Rs. 3.60 crores in July 2022 and Rs. 2.97 crores in September 2022. While discharging GST for July 2022, the Petitioner inadvertently availed and utilized ITC of Rs. 38,60,608/-, which was subsequently reversed through Form DRC-03 dated

11.04.2023.

4.4 It appears that the respondent department sought for certain information by alleging that the petitioner had filed NIL returns for Financial Year (F.Y) 2022-23 and F.Y. 2023-24 except for July, 2022 and September, 2022 and had availed ITC on invoices issued by GIDC, which was purportedly in the nature of blocked credit under Section 17(5)(d) of the GST Act. Accordingly, a spot visit was conducted at the registered premises of the petitioner on 01.11.2023 an