Section 140 of the CGST Act, 2017 — Transitional Credit  —- The petitioner challenged the order dated 02.02.2021, seeking to deny the ITC of Rs. 17,60,473/-. The petitioner’s old concern and its stock, credit were taken over by the new partnership concern. While filing monthly return for the month of April 2017 through online, the petitioner reported opening balance of credit of Rs. 17,60,473/-. However, the same was not reflected in the online monthly return and therefore, the petitioner had sent a representation dated 08.05.2017. The petitioner was issued with pre-assessment notice and they have replied the same. The impugned order has been passed without following the principles of natural justice, inasmuch as the petitioner was not heard. The court observed that if the above said credit could be validly transiting from then why the credit should not be allowed to the petitioner. The impugned order has been passed without following the principles of natural justice and therefore, it is liable to be quashed.

Held that:- The Hon’ble High Court quashed the impugned order and remitted the case back to the respondent to pass a speaking order, within a period of three months.