NB International Vs Commissioner (Punjab And Haryana High Court)
The Punjab and Haryana High Court examined a writ petition seeking unblocking of Input Tax Credit (ITC) amounting to ₹82,50,038 lying in the petitioner’s Electronic Credit Ledger (ECL). The petitioner, a partnership firm engaged in manufacturing brass and copper sheets and utensils in Haryana, was registered under the Central and Haryana Goods and Services Tax Acts, 2017. It had availed ITC in accordance with Section 16 of the GST Act.
The grievance arose when, without prior investigation or communication, the petitioner’s ITC was blocked on 21.11.2023 under Rule 86A of the CGST/HGST Rules, 2017. The blocking was based on a communication dated 17.11.2023, wherein the tax authorities stated that one of the petitioner’s suppliers was found non-existent at its registered place of business and had allegedly passed on ITC to various recipients. On this basis, the authorities requested blocking of ITC availed from that supplier. The petitioner asserted that no opportunity was given to establish the genuineness of its purchases before blocking the credit.
After the blocking, the petitioner submitted a detailed representation on 01.01.2024 explaining that it was a bona fide purchaser and had availed ITC based on valid purchase documents. Upon consideration, ITC of ₹27,48,835 was unblocked on 16.02.2024, but the remaining amount continued to remain blocked. It was also pointed out that on the date of blocking, only ₹55,01,203 was available in the ECL, resulting in blocking even beyond the available balance, which was later corrected to the extent of the negative balance.
