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This court is of the view that since a proceeding under Section 74(1) of the CGST Act, 2017 has been launched by the respondent No.5, that proceeding should be allowed to reach its logical end. But for the contemplative action, due payment of the petitioner is on hold, the respondent No.5 is directed to complete the proceeding within a period of two months from the date of receipt of the reply from the petitioner without fail.

Section 74 of the CGST Act — Show Cause Notice –-- The petitioner challenged the direction in the communication dated 20.12.2019, whereby the respondent informed that it has come to their knowledge that the NF Railways Construction has engaged the petitioner for supply of works contract service and accordingly the petitioner and their associates have supplied taxable services attracting payment of GST. The petitioner has not filed GSTR-3B return since 01.04.2018 and GSTR 1 return since 01.04.2019 and thus they have not obliged their tax liabilities. The petitioner has been alleged of availing ITC by filing GSTR 1 return till March, 2019. The respondent counsel submitted that petitioner has irregularly availed ITC which need to be reversed and tax to be paid with applicable interest. Vide communication dated 20.12.2019, the respondent No.3 was asked to hold the payment until a clearance is given by the respondent No.5. The respondent No. 5 has produced a copy of the notice issued under Section 74(1) whereby the petitioner has been asked to show-cause within 30(thirty) days. The court observed that since a proceeding under Section 74(1) has been launched by the respondent, that proceeding should be allowed to reach its logical end. But for the contemplative action, due payment of the petitioner is on hold. Held that:- The Hon’ble High Court directed the respondent No. 5 to complete the proceeding within a period of 2(two) months from the date of receipt of the reply from the petitioner.
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