Tvl. Guruvammal Tex Vs Assistant Commissioner (ST) – II (Madras High Court)
The Madras High Court disposed of the writ petition challenging the blocking of the petitioner’s electronic credit ledger under Rule 86A of the GST enactments by an order dated 25.03.2025. The petitioner contended that the blocking order did not contain any reasons, making it liable to be quashed, and submitted that the action had severely affected its business.
The petitioner informed the Court that a DRC-01 notice dated 23.04.2025 had subsequently been issued, to which replies had been submitted on 24.05.2025, 24.06.2025, 26.06.2025, and 01.07.2025. It was further argued that, even if an adverse order were ultimately passed, the respondents could insist only on payment of 10% of the disputed tax amount in accordance with law.
The petitioner also submitted that the DRC-01 notice was the first communication informing it that Input Tax Credit (ITC) of Rs. 43,58,856 was alleged to have been wrongly availed on supplies received from M/s. International Enterprises. According to the petitioner, the ITC was legitimately availed on the basis of genuine tax invoices issued by the supplier and was reflected in the auto-populated Form GSTR-2A.
After considering the submissions of both parties, examining Rule 86A, and taking note of the petitioner’s initial admission dated 24.05.2025 as well as its subsequent explanations and communications dated 24.06.2025, 26.06.2025, and 01.07.2025, the Court disposed of the writ petition with specific directions.
