Section 73/74 of the CGST Act, 2017 —– Show Cause Notice — The petitioner sought directions for quashing impugned letter dated 13.11.2020; for quashing and setting aside the action of blocking of input tax credit. The writ applicants are here before Court aggrieved by two aspects, first, blocking of the ITC credit and secondly, passing an order dated 13.11.2020 raising a demand of Rs.61,47,499/- towards tax. The respondent counsel submitted that the electronic credit ledger, which was blocked, has now been unblocked. The court observed that if any liability is to be fixed with respect to payment of tax, it has to first start with issuance of a show cause notice under Section 73 or Section 74 of the Act. Thereafter, full fledged assessment proceedings are to be undertaken wherein the assessee is given an opportunity of hearing. It appears that although, the subject matter was unblocking of the ITC credit yet, the final liability has also been fixed.

Held that:- The Hon’ble High Court quashed the impugned communication dated 13.11.2020, reserving the liberty for the respondents to initiate fresh proceedings in accordance with law.