Section 73 of the CGST Act, 2017— Show Cause Notice –- The petitioner challenged the SCNs both dated 23.07.2020, issued under section 73(1) and sought for quashing the adjudication orders dated 19.10.2020. The petitioner further prayed for a direction to the respondents for unblocking credit ledger which was blocked on 17.02.2020. It is alleged that the petitioner availed ineligible credit of input tax under fake invoices by engaging himself in bill trading/circular trading without physical movement of goods. Thereafter, the Respondent blocked the credit ledger account of the petitioner and the petitioner was in receipt of DRC-01A being intimation of liability under section 74(5). The petitioner duly filed written submission along with the documentary proof. However, during pendency of these applications, the credit ledger has been unblocked though the amount has been realized. The respondent dropped the proceeding under section 74(1) and initiated proceedings under section 73(1) and issued SCNs, without issuing DRC-01A. The court observed that the impugned adjudication order transpires that the respondent No.4 had admitted that upon re-verification, it was found that e-way bills and computer generated measurement slip are true and genuine documents and the petitioner in the past has duly discharged its liability towards any mismatch in ITC. Further the firms with whom it was alleged that the petitioner was having transactions had filed writ application, which were partly allowed by this court and the respective impugned show cause notices, the adjudication orders and the summary of the order/demand notices in DRC-07 were set aside and the matter was remitted back to the concerned authority.

Held that:- The Hon’ble High Court set aside SCNs dated 23.07.2020 and also the adjudication orders, dated 19.10.2020 and directed the respondents to proceed in the matter from the stage of SCN after following principle of natural justice.