1 Neutral Citation No. - 2025:AHC:57445-DB Chief Justice's Court Case :- WRIT TAX No. - 981 of 2025 Petitioner :- M/S Nagina International Respondent :- State of Uttar Pradesh and another Counsel for Petitioner :- Pranjal Shukla, Gauransh Mishra, Parth Goswami Counsel for Respondent :- Ankur Agarwal (S.C.) Hon'ble Arun Bhansali, Chief Justice Hon'ble Kshitij Shailendra, J. 1. This petition is directed against demand order dated 30.08.2024 and show cause notice dated 17.05.2024 issued by Deputy Commissioner, State Tax, Jurisdiction Bijnor, Sector 1, Bijnor, Moradabad under Section 73 of the U.P. Goods and Services Tax Act, 2017 (for short ‘the Act’). 2. The petitioner was issued a show cause notice dated 04.04.2024 under Section 61 of the Act intimating discrepancies in the return after scrutiny. The notice, inter alia, indicated difference between taxable turnover as declared in GSTR-1 and that declared in monthly returns, difference in total taxable turnover as declared in GSTR-9 and that GSTR-9C, difference between liability declared in GSTR-1 and that declared in monthly returns, difference between ITC claimed in GSTR-3B and ITC declared in GSTR-2A, difference between tax payable in FY as declared in GSTR-9 and GSTR-9C, unreconciled ITC declared in GSTR- 9C. 3. As no response to the notice under Section 61 was filed, notice under Section 73 was issued to the petitioner, inter alia, confined to difference between GSTR-9 and GSTR-1 and required to deposit IGST to the Rs. 2,73,914.72/-. The petitioner was required to file reply by 18.02.2023 and date of personal hearing was also fixed on the same date. Reply to show cause notice was filed by the petitioner on 18.02.2023 2 along with Form DRC-03 by making payment of a sum of Rs. 2,76,705/- towards IGST liability of export of goods for FY 2019-20 less paid GSTR-3B against IGST reflecting in GSTR-1 for the same period. The Assessing Authority passed order dated 30.08.2024 imposing interest and penalty. 4. Another notice under Section 73 was issued to the petitioner pointing out further discrepancies and demanding tax, interest and penalty to the tune of Rs. 2,89,174/-. 5. Reply to the said notice was filed, inter alia, claiming that already excess claim ITC to the tune of Rs. 6,11,356/- has been deposited through DRC-03. The liability to pay interest was contested. Order dated 30.08.2024 was passed, inter alia, raising demand of Rs. 82,078/-. 6. Another notice dated 17.05.2024 impugned in the present writ petition was issued to the petitioner seeking explanation in relation to refund of Rs. 33,71,562/- under the IGST head as declared in GSTR-9. The petitioner filed reply indicating that it had claimed refund against zero rated supply during the period 2019-20 and refund was sanctioned by the Central GST Officer, therefore, there is no jurisdiction in the State GST Authority to proceed against the petitioner in relation to IGST refund and that the petitioner has attached BRC, bank statement and tax invoice. In the notice issued, the date of filing reply was fixed as 17.06.2024 and date of personal hearing was fixed as 17.06.2024 i.e. the same date. 7. The respondent Authority by order dated 30.08.2024 (Annexure-11) observed that despite specific query, the requisite BRC etc. has not been made available, whereas under Rule 96B of the Rules, proof of remittance is required to be produced and consequently, demand to the tune of Rs. 33,71,562/- was created along with interest and penalty. 8. Learned counsel for the petitioner, at the outset, made submissions that the Authority, State Tax has no jurisdiction to adjudicate issues pertaining to IGST. Further submissions have been made that Circular 3 dated 18.11.2019 issued by Central Board of Indirect Taxes and Customs in para 48 specifically provided that BRC is not required to be produced and, therefore, the requirement indicated by the Authority for the purpose of raising demand, being against the said Circular, deserves to be set aside. Issue was also raised that fixing the date of reply to the show cause notice as the same date as date of hearing is also not justified and that before passing the order impugned, no opportunity of hearing was provided to the petitioner, which resulted in passing of the order impugned. It was sought to be emphasised that the implication of the Circular dated 18.11.2019 issued by the CBITC could only be argued during course of personal hearing, which has led to passing of the wrong order. 9. Submissions were also made that the demand pertains to the period 2019-20, whereas the provisions of Rule 96B of the Rules pertaining to recovery of refund of unutilised input tax credit or integrated tax paid on export of goods where export proceeds not realised was inserted vide Notification No. 16/2020 – Central Tax dated 23.03.2020 in the Central Goods and Services Tax Rules, 2017 by Central Goods and Services Tax (Third Amendment) Rules, 2020, which Rules came into force on the date of their publication in the Official Gazette and, therefore, the provisions of Rule 96B of the Rules being not retrospective, the demand pertaining to the year 2019-20 could not be raised and on that count also, the order impugned deserves to be quashed and set aside. 10. We have considered the submissions made by counsel for the parties. 11. So far as the plea raised regarding the jurisdiction of the State Authorities in dealing with issues pertaining to IGST is concerned, the plea raised by the petitioner apparently has no substance as Section 4 of the Integrated Goods And Services Tax Act, 2017 dealing with authorization of Officers of State Tax or Union Territory Tax as proper 4 Officers in certain circumstances clearly provides that the Officers appointed under the State Goods and Services Tax Act are authorised to be the proper officers for the purposes of the IGST and subject to such exceptions and conditions, as the Government shall, on the recommendations of the Council, by notification specify. It is not the case of the petitioner that under any notification specifying exceptions and conditions, the present subject matter could not have been dealt with by the State Tax Authorities and, as such, the plea raised in this regard has no substance and the same is, therefore, rejected. 12. So far as the plea raised pertaining to lack of reasonable opportunity of being heard is concerned, it would be noticed from the show cause notice dated 17.05.2024 that date of filing reply was fixed as 17.06.2024 and the same date was fixed as date of personal hearing. Though it is claimed that reply to the show cause notice (Annexure-10) was submitted on 20.08.2024, no proof of filing the reply has been produced and as such, based on mere averments made in this regard, the plea of having filed the reply, cannot be accepted. 13. However, it would be seen that the matter was ordered to be fixed for filing the reply on 17.06.2024 and the same date was fixed for personal hearing and despite the fact that no reply was filed on 17.06.2024 and apparently, no appearance for the purpose of personal hearing was made, the order was not passed on the date fixed i.e. 17.06.2024 and the same was passed on 30.08.2024, prior to which apparently no fresh notice/reminder was issued to the petitioner for appearance/filing reply/personal hearing. The order impugned has been passed by reiterating the allegations as made in the show cause notice. 14. The plea sought to be raised by the petitioner based on the CBITC Circular dated 18.11.2019 as well as the fact that the provisions of Rule 96B of the Rules were introduced by a Notification dated 23.03.2020 and the same being not retrospective, had no application to the case of the 5 petitioner, despite being legal pleas, having not been examined/could not have been examined by the Assessing Authority, which aspect does require a determination by this Court at this stage, when the Authority under the Act has not applied its mind to the said issues. 15. In view of the above peculiar circumstances of the case wherein the plea raised essentially is legal and its implication needs to be examined by the Authority in the circumstances of the case, we deem it appropriate and, therefore, set aside the order dated 30.08.2024 passed by the Deputy Commissioner, State Tax, Jurisdiction Bijnor, Sector 1, Bijnor, Moradabad and remand back the matter to the said Authority. The petitioner shall file its response to the show cause notice dated 17.05.2024 by 02.05.2025 and on filing of the said reply, respondent no.2 shall afford opportunity of personal hearing to the petitioner and thereafter pass fresh order in accordance with law. 16. With the above directions, the writ petition stands disposed of. Order Date :- 18.4.2025 SL (Kshitij Shailendra, J) (Arun Bhansali, CJ) Digitally signed by :- SHYAM LAL High Court of Judicature at Allahabad