Allahabad HC Quashed ITC Blocking Order for Failure to Record Reason to Believe

Shree Salasar Metals Vs Union of India And 2 Others (Allahabad High Court) The Allahabad High Court adjudicated a writ petition challenging an order passed under Rule 86A(1) of the CGST Rules, 2017, whereby the petitioner’s Input Tax Credit (ITC) amounting to Rs. 2,68,416/- was blocked in its Electronic Credit Ledger. The petitioner contended that the action was without jurisdiction, as the authority had failed to record any “reason to believe,” which is a mandatory statutory requirement under Rule 86A. It was argued that no tangible material existed to suggest that the ITC had been frau...