Raghbir Singh Govt. Contractor Vs State of Haryana and others (Punjab and Haryana High Court)
The Punjab and Haryana High Court considered a writ petition challenging the retrospective amendment dated 09.10.2019 to Rule 61 of the Central GST Rules, 2017 and seeking unblocking of input tax credit (ITC) amounting to Rs.95,50,660. The petitioner, a government contractor, had filed NIL GSTR-3B returns for FYs 2017-18 and 2018-19 due to difficulties in determining output tax liability, as bills were not cleared in time by the department. Subsequently, the petitioner claimed accumulated ITC in August 2019 and filed annual returns and reconciliation statements with supporting data from GSTR-2A.
On 28.01.2020, the petitioner’s electronic credit ledger was blocked under Rule 86A, followed by notices seeking explanation for mismatches between GSTR-3B, GSTR-2A and GSTR-1. During the pendency of proceedings, the petitioner restricted relief to unblocking of the credit ledger, keeping the challenge to the vires of Rule 61 and the notification dated 10.09.2018 open.
The Court examined the notification dated 02.11.2021 issued by the Government of India, which clarified that restriction under Rule 86A cannot exceed one year from the date of imposition. As the ITC ledger had remained blocked for nearly three years since 28.01.2020, the Court held that the restriction could not continue. Accordingly, the petition was disposed of with a direction to the respondents to unblock the petitioner’s credit ledger, while leaving the constitutional challenge to Rule 61 and the earlier notification open.+
