GST authorities lacks jurisdiction to examine correctness of credit transitioned from erstwhile tax regime

Last updated: 28 November 2022

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The Jharkhand High Court has ruled that Goods and Services Tax (GST) authorities do not have the jurisdiction to examine the correctness of CENVAT credit transitioned from the previous tax regime. The court found that Section 73 of the CGST Act, which deals with tax shortfalls and wrongly availed input tax credit, does not grant powers to assess the admissibility of credit under older laws. Consequently, proceedings initiated by GST authorities based on such assessments were quashed.

Court :
Jharkhand HC

Brief :
The Hon'ble High Court, Jharkhand ("the High Court") in the case of M/s. Usha Martin Ltd. v. Additional Commissioner & Ors. (W.P.(T) No. 3055 of 2022) dated November 10, 2022, quashed the proceedings initiated by Joint Commissioner ("the Respondent") by issuing Show Cause Notice dated September 13, 2021 ("SCN") under Section 73 of the Central Goods and Services Tax, 2017 ("the CGST Act") and held that Goods and Services Tax Authorities ("theGST Authorities") does not have jurisdiction to determine whether CENVAT credit was admissible under the respective Act.

Citation :
(W.P.(T) No. 3055 of 2022) dated November 10, 2022

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