Section 140 of the CGST Act, 2017 – Transitional Credit -  The petitioners challenged the respective summary notices in terms of GST DRC-01 read with Rule 142 and summary orders in Form DRC-07 and for a direction upon the respondents to unblocked/re-credit the amount of ITC illegally blocked / debited from the Electronic Credit Ledger of the petitioners. The counsel for the petitioners submitted that issue is in relation to non-compliance of the statutory provision relating to service of show cause notice in terms of GST DRC-01 before blocking /debiting of the electronic credit ledger. The court placed its reliance upon the case of NKAS Service Private Ltd.Vs. State of Jharkhand & Ors. The court observed that in none of the case personal hearing has been granted to the petitioners. Thus, the petitioners in the respective applications have been denied of principle of natural justice. The court observed that Hon’ble Apex Court in order dated 22nd July, 2022 has directed the GST Network to open the common portal to file/rectify TRAN-1 and TRAN-2 for a period of two months, i.e., with effect from 1st September, 2022 to 31st October, 2022 to enable the different parties to avail Transitional Credit. Ministry of Finance vide its Circular No.182/14/2022-GST dated 10.11.2022 has issued guidelines for verifying the Transitional Credit in light of the order of the Hon’ble Supreme Court.

Held that:- The Hon’ble Court set aside the SCNs in terms of GST DRC-01 read with Rule 142, summary of orders in Form DRC-07 and respective adjudication orders and all consequential orders. Further directed the respondents to abide by the direction of the Hon’ble Supreme Court and proceed in accordance with law after proper scrutiny of the revised TRAN-1, if any filed by the individual petitioner. In case any of the petitioner fails to file its revised TRAN-1 during this window period, the respondent may initiate fresh proceeding after issuance of a proper SCN in accordance with law.