Case Details: Niket Bipinbhai Patel vs. Assistant Commissioner (A.E.), CGST-Central Excise, Vadodara-II (2026) 40 Centax 335 (Guj.)
Judiciary and Counsel Details
- A.S. Supehia & Pranav Trivedi, JJ.
- Shri Hardik V Vora, for the Petitioner.
- Shri Deepak N Khanchandani, for the Respondent.
Facts of the Case
The petitioner, a Non-Resident Indian (NRI), had acquired leasehold rights over a Gujarat Industrial Development Corporation (GIDC) plot and was engaged in the business of undertaking sub-plotting activities and subsequently transferring leasehold rights of such sub-plots. During the relevant period, the petitioner sold a plot and discharged GST liability by availing unutilized Input Tax Credit (ITC), which was subsequently reversed. The department sought certain information, alleging that the petitioner had filed NIL returns and availed ITC on invoices that were in the nature of blocked credit, and accordingly issued a notice under Form GST DRC-01A demanding Rs. 98.11 lakh, along with interest and penalty. The petitioner submitted that the impugned notice was without jurisdiction. The matter was placed before the High Court.
High Court Held
The High Court held that a plain reading of Section 17(5)(d) of the CGST Act and Gujarat GST Act showed that apportionment of credit and blocked credit related to goods or services used for the construction of immovable property. It held that the respondent had not established that the petitioner undertook any construction activity and therefore Section 17(5)(d) would not apply. The High Court further held that there was no fraud, misstatement or suppression of facts in the availment of ITC, and the respondent had also not denied that the utilised ITC was subsequently reversed by the petitioner. Accordingly, it held that resort to Section 74 was unwarranted, quashed the notice issued in Form GST DRC-01A and directed the respondent to unblock the ITC amounting to Rs. 98.11 lakh.
