M/s. TVS Motor Company Limited, rep. by its Authorized Signatory Versus The Assistant Commissioner, CGST and Central Excise, Hosur, The Commissioner of Central Goods and Services Tax, Salem And The Union of India, rep. by its Secretary, Ministry of Finance, New Delhi – 2018 (9) TMI 371 – MADRAS HIGH COURT – 2018 (16) G. S. T. L. 17 (Mad.) – Transitional Credit – Section 140 of the Central General Sales Tax Act, 2017 – violation of Principles of Natural Justice – Held that:- The respondent states that the impugned order is only a show cause notice. This Court is unable to agree with the said stand taken by the learned Senior Panel Counsel appearing for the Revenue, as a show cause notice cannot pre-judge the issue. Had the first respondent issued a notice calling upon the petitioner to state as to why the transitional credit claimed by them cannot be granted or should be directed to be reversed, then it would be a different matter.
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In the impugned proceedings, the first responden
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w cause notice, but a demand, which has been made on the petitioner without considering the objections filed by the petitioner and that it is not in the nature of a show cause notice, as a final decision has been taken and communicated to the petitioner. It is further submitted that the impugned order denying a legitimate transitional credit eligible to the petitioner in accordance with Section 140 of the Central General Sales Tax Act, 2017 is illegal and arbitrary and has been passed in violation of the principles of natural justice. It is also submitted that the the first respondent has only made a decision by denying the transitional credit, which the petitioner is statutorily entitled to under Section 140(1) of the said Act. 4. The learned counsel for the petitioner submits that on facts, the petitioner has got an excellent case and when a notice was issued on 04. 1. 2018 to reverse the credit, within 24 hours, the petitioner submitted a reply dated 04. 1. 2018, followed by another
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how cause notice. This Court is unable to agree with the said stand taken by the learned Senior Panel Counsel appearing for the Revenue, as a show cause notice cannot pre-judge the issue. Had the first respondent issued a notice calling upon the petitioner to state as to why the transitional credit claimed by them cannot be granted or should be directed to be reversed, then it would be a different matter. However, in the impugned proceedings, the first respondent denied the credit and all that has been granted is 15 days' time to reverse the credit, which, according to the first respondent, is inadmissible. These are sufficient grounds to hold that the impugned order is in violation of the principles of natural justice. On this ground alone, the petitioner is entitled to succeed. 7. Accordingly, the writ petition is allowed, the impugned order is set aside and it is open to the first respondent to proceed afresh in accordance with law. No costs. Consequently, the connected WMP is c
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