IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 03.07.2023 CORAM :

THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.No.19583 of 2023 and W.M.P.Nos.18844 and 18845 of 2023 M/s.Nithya Packaging Private Limited, Represented by its Authorized Signatory Mr.A.Sivakumar, No.48, 3rd Cross Street, Anandarangapillai Nagar, Puducherry - 605 008. ... Petitioner Vs.

1.The Assistant Commissioner of GST and Central Excise, Puducherry III Division, No.14, Municipal Street, Azeez Nagar, Reddiarpalayam, Puducherry - 605 010.

2.The Superintendent of Central Tax and Central Excise, Office of the Commissioner of Central Tax and Central Excise, Audit-I Commissionerate, No.1775, Jawarharlal Nehru Inner Ring Road, Anna Nagar, Western Extension, Chennai - 600 101.

3.The Superintendent of GST and Central Excise, Range-III-B, Division-III of CGST Puducherry Commissionerate, 2nd Floor, RS 48/1, Azeez Nagar, Reddiarpalayam, Puducherry - 605 010.

4.The Assistant Commissioner of GST and Central Excise, Office of the Commissioner of GST and Central Excise, Audit-I Commissionerate, 1775, Jawarharlal Nehru Inner Ring Road, Anna Nagar, Western Extension, Chennai - 600 101. ... Respondents Prayer: Writ Petition filed under Article 226 of Constitution of India, for issuance of a Writ of Certiorari, to call for the impugned Order-in-Original No.3/2023 (GST) passed by the first respondent in C.No.ADJ/GST/122/2022-CGST-DIV-III-COMMRTE-PUDUCHERRY DIN-20230359XQ0000333CF2 dated 28.03.2023 and the "Summary of the order" passed in Form GST DRC-07 in ZD340423001374Y dated 18.04.2023 and quash both the proceedings as passed contrary to law and opposed to the principles of natural justice.

For Petitioner : Mr.P.Rajkumar For Respondents : Mr.Sai Srijan Tayi Senior Standing Counsel

ORDER

Mr.Sai Srijan Tayi, learned Senior Standing Counsel takes notice on behalf of the respondents.

2. Heard the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents.

3. The petitioner had difficulty in transitioning Input Tax Credit on capital goods at the time when GST was implemented with effect from 01.07.2017. The petitioner has communicated with the Department and the officials named in the Web Portal. However, he is unable to transfer the transitional credit properly. Thereafter, the petitioner appears to have taken a decision to avail Input Tax Credit, which the petitioner could not transition under Section 140 of the Central Goods and Services Tax Act, 2017. This was also confirmed by a Sanction Order (Tran-1 Credit) dated 20.02.2023. Meanwhile, the proceedings were initiated to recover the amounts from the petitioner, which has culminated in the impugned order.

4. By the impugned order dated 28.03.2023, the first respondent has imposed penalty and interest on the petitioner under Section 50 and Section 73(9) read with Section 122(2)(a) of the CGST Act. The dispute has arisen on account of the fact that the petitioner has filed a revised return in terms of the decision of the decision of the Bombay High Court in Chep India Private Limited Vs Union of India and others in W.P.No.1075 of 2021 dated 27.06.2022 and the decision of the Hon'ble Supreme Court in Union of India and another Vs FILCO Trade Centre Private Limited and another in SLA(C)Nos.32709 and 32710 of 2018, dated 22.07.2022, claiming Input Tax Credit, which was earlier sanctioned to the petitioner by a Sanction Order (Tran-1 Credit) dated 20.02.2023.

5. The only point that arises for consideration is whether the petitioner can be mulcted with the interest and penalty even though the credit which was taken has been sanctioned and merely because the petitioner had also filed returns to transition the same credit.

6. The learned Senior Standing Counsel for the respondents would submit that the matter can be agitated by the petitioner before the Appellate Commissioner as to whether the petitioner will be liable to pay interest and penalty under Section 50 and Section 73(9) read with Section 122 (2) (a) of t