Heard learned counsel for the petitioner Mr. Nitin Kr. Pasari and Mr. Piyush Chitresh, A.C. to learned A.G.

Writ petitioner approached this Court on blocking of its electronic credit ledger due to non-filing of GSTR-3B by its vendor (respondent no.4) though GSTR-I was filed by him. Two demand notices (Annexure-5 series) bearing nos.39 and 40 of the same date i.e. 5thAugust 2020 were issued by the Deputy Commissioner, State Taxes(respondent no.3). The instant notices were issued under Rule 86A(1)(a)(i) of the Jharkhand Goods and Service Tax Rules, 2017 as according to the respondent no.3, ITC availed by the petitioner was ineligible. Petitioner was asked to reverse the ITC equivalent to ₹ 21,38,760/-and ₹ 2,79,720/-with interest computed under Section 50 of the JGST Act, 2017respectively thereupon by 17thAugust 2020. During pendency of the writ application, the demands were revised as also stated at para-6 of the counter affidavit dated 27thNovember 2020. These two revised demand notices bearing no.458 and 459 dated 14thOctober 2020 have been assailed through I.A. No.6036/2020 by the petitioner.

A counter affidavit to the instant I.A. has also been filed by the respondents.

In substance, the case of the petitioner is that these notices have been issued without proper application of mind. The first notice was issued under Rule 86A(1)(a)(i) on the foundational basis that respondent no.4 was shown as ‘non-existent dealer’. The revised notice has been issued under Rule 86A(1)(b) on the basis that the respondent no.4 is a GSTR-3B

return defaulter. It is further case of the petitioner that transaction between the petitioner and the respondent no.4 were over by 2ndMay 2019 whereas Rule 86A has been brought by way of an amendment w.e.f. 1stJanuary 2020 vide notification dated 26thDecember 2019 (Annexure-4). Under the revised notice the demand has been reduced since the tax dues have been partially deposited through the interim resolution professional. Petitioner has shown evidence of invoice and payment details, but instead of proceeding against the vendor (respondent no.4),the impugned notices have been issued for reversal of ITC against the petitioner. However, learned counsel for the petitioner does not dispute that aproceeding under Section 73(1) of the JGST Act read with Rule 142(1A) of the JGST Rules 2017 hasbeen initiated against the petitioner and is presently pending before the respondent no.3.

Though arguments have been made on merits as well by the learned counsel for the petitioner, but learned counsel for the State submits that since a proceeding under Section 73 of the JGST Act has been initiated against the petitioner, he should appear and place all the relevant documents, invoices, etc. before the respondent no.3 Deputy Commissioner of State Taxes, Adityapur Circle, Jamshedpur instead of pursuing the writ petition at this stage.

Learned counsel for the petitioner is not in a position to dispute that since the proceedings have already been initiated under Section 73 of the Act of 2017 by the respondent no.3, the issue at hand should not be agitated on merits in the writ proceedings.

Having regard to the aforesaid facts and circumstances, this Court is also of the view that the petitioner should subject himself to the proceedings initiated under Section 73 of the JGST Act before the respondentno.3 Deputy Commissioner of State Taxes, Adityapur Circle, Jamshedpur and produce all relevant documents, invoices, records, etc. for proper adjudication thereupon. It would not be proper for the Writ Court to enter into the merits of the controversy at this stage in such circumstances. Petitioner should appear before the respondent no.3 on 8thFebruary 2021. Respondent no.3 would endeavour to conclude the proceedings preferably within a period of 12 weeks thereof. Writ petition stands disposed of. I.A. No. 6036 of 2020 seeking amendment is allowed. Let it form part of the record.