Gujarat High Court
Sharda Construction Through ... vs State Of Gujarat on 8 May, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/15204/2024 JUDGMENT DATED: 08/05/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15204 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE P. M. RAVAL
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Approved for Reporting Yes No
No
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SHARDA CONSTRUCTION THROUGH SHAILESHKUMAR DAHYABHAI
PATEL
Versus
STATE OF GUJARAT & ORS.
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Appearance:
UCHIT N SHETH(7336) for the Petitioner(s) No. 1
MR TRUPESH KATHIRIYA, AGP for the Respondent(s) No. 1,2,3
NOTICE SERVED for the Respondent(s) No. 1,2,3
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CORAM: HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE P. M. RAVAL
Date : 08/05/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Uchit N. Sheth
for the petitioner and learned Assistant
Government Pleader Mr.Trupesh Kathiriya for
the respondents.
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2. Rule, returnable forthwith. Learned
Assistant Government Pleader Mr.Trupesh
Kathiriya waives service of notice of rule for
and on behalf of the respondents.
3. By this petition under Article 227 of the
Constitution of India, the petitioner has
prayed for following reliefs :
"A. This Hon'ble Court may be pleased to
issue a writ of mandamus or writ in the
nature of mandamus or any other
appropriate writ or order quashing and
setting aside impugned show cause
notice dated 27.9.2023 (annexed at
Annexure A) issued under Section 73 of
the GST Acts along with all subsequent
proceedings and orders as being wholly
without jurisdiction, arbitrary and
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illegal;
B. This Hon'ble Court may be pleased to
issue a writ of certiorari or writ in
the nature of certiorari or any other
appropriate writ or order quashing and
setting aside impugned order dated
22.12.2023 (annexed at Annexure B) as
well as order dated 21.6.2024 (annexed
at Annexure C) as being wholly without
jurisdiction, arbitrary, mechanical and
illegal;
C. Without prejudice to the above and
in the alternative, this Hon'ble Court
may be pleased to strike down and
declare Section 107(4) of the GST Acts
in as much as debars appellate
authority from condoning delay in
filing appeals even in case where the
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taxable person is in a position to
satisfactorily explain the delay as
being manifestly arbitrary,
discriminatory and violating Articles
14 and 19(1)(g) of the Constitution of
India;
D. Pending notice, admission and final
hearing of this petition, this Hon'ble
Court may be pleased to stay operation,
execution and implementation of
impugned order dated 22.12.2023
(annexed at Annexure B);
E. Ex parte ad interim relief in terms
of prayer D may kindly be granted;
F. Such further reliefs) as deemed fit
in the facts and circumstances of the
case may kindly be granted in the
interest of justice for which act of
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kindness your Petitioner shall forever
pray."
4. The brief facts of the case are as under :
4.1. The petitioner is a proprietorship
concern engaged in the business of building
construction and duly registered under the
Goods and Services Tax Act, 2017 (for short
'the GST Act').
4.2. It is the case of the petitioner that
the petitioner regularly files returns and
pays taxes under the GST Act and at the time
of obtaining registration, the petitioner had
submitted its current Email address at that
point of time on the GST portal, however,
inadvertently, could not pay domain renewal
charges for such Email post 20.06.2021 and
therefore, such Email address got deactivated.
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4.3. The petitioner being engaged in
building construction is entitled to claim
Input Tax Credit (for short 'the ITC') of the
tax paid on inputs, input services and capital
goods used in the course or furtherance of
business, however, Section 17(2) of the GST
Act read with Rules 42 and 43 of the Central/
State Goods and Services Tax Rules, 2017 (for
short 'the GST Rules') requires reversal of
such ITC to the extent it is attributable to
exempt supplies which includes building units
sold after issuance of Completion Certificate
by the competent authority.
4.4. It is the case of the petitioner that
the petitioner claimed the ITC during the year
2017-18 in respect of purchases of goods and
services made in the course or furtherance of
business. The supply of building units made
after issuance of Completion Certificate was
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also duly reflected by the petitioner in the
GST returns.
4.5. In so far as the reversal of the ITC
is concerned, since some miscellaneous work
relating to the project was still going on,
the petitioner was awaiting completion in
entirety so as to reverse the ITC on a
consolidated basis because any claim or
reversal of the ITC for the year 2017-18 was
possible as per Sections 16(4) and (9) of the
GST Act.
4.6. It is the case of the petitioner that
after completion of the entire project, the
ITC attributable to exempt supplies was
reversed by the petitioner on 19.10.2018 while
filing return for the month of September 2018
and the fact that the ITC had already been
reversed was also reflected by the petitioner
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in annual return filed in Form GSTR 9 and
annual reconciliation statement filed in Form
GSTR 9C for the year 2018-19.
4.7. Despite reversal of the ITC being made
by the petitioner pertaining to the years
2017-18 as well as 2018-19 on 19.10.2018,
impugned show-cause notice was uploaded on the
portal on 27.09.2023 on the ground that the
petitioner had not reversed the ITC pertaining
to exempt supplies and as e mail address of
the petitioner had been deactivated, the
petitioner did not receive any intimation of
such show-cause notice. The petitioner was
also not aware about such notice having been
uploaded on the portal and hence, the
petitioner could not respond to the notice and
the respondent-authority proceeded to pass ex-
parte order dated 22.12.2023 confirming demand
of tax with interest and penalty on the ground
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of non-reversal of input tax credit under
Rules 42 and 43 of the GST Rules. It is the
case of the petitioner that such order was
only uploaded on the portal and the petitioner
did not receive any intimation of the same and
therefore, the petitioner could not
immediately take legal recourse for
challenging such order as the petitioner was
completely unaware such order.
4.8. It is also the case of the petitioner
that the Accountant of the petitioner received
a telephonic call on 03.05.2024 from the
Jurisdictional Officer inquiring about payment
to be made by the petitioner towards the
demand raised in the impugned order and
therefore, it was informed by the petitioner
that the petitioner was unaware about any such
order having been passed and requested for
copy of such order and thereafter, on
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06.05.2023, the order was manually served upon
the petitioner with due seal of the
Department.
4.9. The petitioner immediately filed an
Appeal on 06.05.2024 for challenging the
Adjudication Order mentioning therein that the
date of communication of the order was
03.05.2024, however, the Appellate Authority
passed the impugned order on 21.06.2024
rejecting the Appeal filed by the petitioner
on the ground of delay in filing the Appeal.
Hence, being aggrieved and dis-satisfied with
the impugned order dated 21.06.2024, the
petitioner has preferred this petition.
5.1. Learned advocate Mr.Uchit Sheth for
the petitioner submitted that the petitioner
has already reversed the ITC in the Electronic
Credit Ledger on 19.10.2018 which is duly
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reflected in the Form GSTR-3B filed for the
month of September, 2018 on 19.10.2018. He
invited the attention of the Court to the Form
GSTR 3B to show that the petitioner has
already reversed the ITC amounting to more
than Rs.40 Lakhs and also referred to the
Electronic Credit Ledger at page No.32 of the
petition to show that there is a debit entry
of Rs.38,01,319/-.
5.2. Learned advocate Mr.Uchit Sheth also
referred to the annual return in Form GSTR 9
to show that there is no outstanding entry for
ITC to be reversed coupled with Form GSTR 9C
reconciliation wherein, it is stated that the
petitioner has already reversed the ITC for
the period 2017-18 and 2018-19. It was
therefore submitted that the respondent-
Authority could not have assumed the
jurisdiction to issue the impugned notice and
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pass the Order-in-Original raising the demand
on ground of non-reversal of ITC otherwise it
would amount to double taxation of the same
amount as the petitioner has already reversed
the ITC on 19.10.2018.
5.3. Learned advocate Mr.Uchit Sheth also
placed on record the working of the ITC
availed and reversal made by the petitioner as
under for the years 2017-18 and 2018-19 :
Sharda Construction
ITC Availed & Reversal Working
Particulars IGST CGST SGST Total
ITC availed during
993 15,08,032 15,08,032 30,17,057
the F.Y. 2017-18
ITC availed during
the F.Y. 2018-19 0 5,41,085 5,41,085 10,82,170
Upto Sep-18
993 20,49,117 20,49,117 40,99,227
ITC utilised during
0 22,109 22,109 44,218
the F.Y. 2017-18
Apr-18 22,109 22,109 44,218
Jun-18 22,368 22,368 44,736
Aug-18 82,368 82,368 1,64,736
ITC utilised during
the F.Y. 2018-19 0 1,26,845 1,26,845 2,53,690
Upto Sept-18
ITC Reversed in
993 19,00,163 19,00,163 38,01,319
Sept-2018 GSTR-3B
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Total 993 20,49,117 20,49,117 40,99,227
0 - - -
Total ITC Utilised 0 1,48,954 1,48,954 2,97,908
Sharda Construction
ITC Availed & Reversal Working
Particulars IGST CGST SGST Total
ITC Reversed in
993 19,00,163 19,00,193 38,01,319
Sept-2018
Less: ITC Reversal
993 14,85,923 14,85,923 29,72,839
of 2017-18
Less: ITC Reversal
0 4,14,240 4,14,240 8,28,480
of 2018-19
Please note that
DRC-01 for F.Y.
2017-18 has 0 14,56,750 14,56,750 29,13,500
mentioned reversal
of ITC of Rs.
Less: Actual
993 14,85,923 14,85,923 29,72,839
reversal as above
Excess ITC reversed
as per actual data -993 (29,173) (29,173) (55,339)
in GSTR-3B
5.4. In support of his submissions,
reliance was placed on the decision of this
Court in case of Ajay Industries & Another
versus Union of India and Others rendered on
16.04.2025 in Special Civil Application
No.2951 of 2025.
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5.5. Learned advocate Mr.Uchit Sheth
submitted that though the impugned show-cause
notice and order were uploaded on the portal,
the petitioner was not aware as no intimation
was given by the respondent-Authority and when
the petitioner was served with the impugned
order dated 22.12.2023 on 03.05.2024 in
physical mode, the petitioner immediately
preferred an Appeal on 06.05.2024 before the
Appellate Authority, however, the same was
dismissed on ground of delay.
6.1. On the other hand, learned Assistant
Government Pleader Mr.Trupesh Kathiriya for
the respondents submitted that the petitioner
has not filed any reply to the show-cause
notice and therefore, the impugned Order-in-
Original was passed in terms of the show-cause
notice. It was also pointed out that the
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respondent-Authorities have already uploaded
the show-cause notice as well as the Order-in-
Original on the portal and the petitioner was
supposed to verify the same and in absence of
any reply filed by the petitioner, the
respondent-Authority has constrained to pass
the Order-in-Original.
6.2. It was further submitted that in
absence of the computation and the
reconciliation which are submitted by the
petitioner before this Court, the respondent-
Authority was not in position to verify the
details and the data from the available
records and therefore the impugned order is
passed.
7. Considering the above submissions, it
appears that it is not in dispute that the
petitioner has reversed the ITC for the period
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2017-18 on 19.10.2018 and therefore, the
respondent could not have assumed the
jurisdiction to issue the impugned notice on
the ground that the petitioner has failed to
reverse the ITC. Moreover, the petitioner has
also admitted that as the GST Portal was new,
the petitioner was not familiar with such
portal and could not verify the uploading of
the notice and subsequent Order-in-Original on
the portal and the petitioner came to know
about the same only when the Order-in-Original
was served in physical form on 03.05.2024 and
the petitioner has already preferred an Appeal
before 06.05.2024, however, Appellate
Authority has not condoned the delay as per
the provisions of Section 107 of the GST Act
and therefore, the petitioner had no option
but to file the present petition.
8. It also appears that the respondent has
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not disputed about the reversal of the ITC by
the petitioner for the period 2017-18 and only
contention raised is that there is no
reconciliation available with the respondent
regarding the ITC reversed by the petitioner
for the years 2017-18 and 2018-19. In such
circumstances, only remedy available is to
quash the impugned Order-in-Original and
remand the matter back to the respondent-
Authority to verify the reversal of the ITC
made by the petitioner for the period 2017-18
in accordance with law and pass appropriate
fresh de novo order in accordance with law.
9. The petition is accordingly disposed of.
The impugned Order-in-Original dated
22.12.2023 is hereby quashed and set aside.
The matter is remanded back to the respondent-
Adjudicating Authority to pass a fresh de
novo order within a period of twelve weeks
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from the date of receipt of the copy of this
order. Rule is made absolute to the aforesaid
extent. No orders as to cost.
(BHARGAV D. KARIA, J)
(P. M. RAVAL, J)
PALAK
