Case Law Details
Jai Matadi Enterprises Vs Commissioner of State Tax and Ors (Bombay High Court)
Heard learned counsel for the parties. The Petitioner has sought a direction to Respondent No. 3 to unblock Input Tax Credit Account in respect of entry amounting to Rs. 81,68,812/- and further directions regarding refund etc.
2. This petition came up on board on 13 September 2022 before the Division Bench (K.R. Shriram and A.S. Doctor, JJ) when the following order was passed.
“1. Ms. Vyas seeks two weeks time to file reply. Time granted. Rejoinder, if any, to be filed and copy served within a week thereafter.
2. Stand over to 11th October 2022.
Until 15th October 2022 Input Tax Account be unblocked.
Steps to be taken forthwith.
3. Bapat states that if petitioner fails in the petition, petitioner is even ready to face prosecution.”
3. Reply filed by the Respondents, apart from dealing with the matter on merits, states that order dated 13 September 2022 has been given effect to and the ledger account was unblocked. We are informed that pursuant to the order of unblocking, Petitioner has utilized Input Tax Credit in question. Order dated 11 October 2022 passed by the Division Bench also refers that after Petitioner’s Input Tax Credit has been unblocked, Petitioner has filed returns. The order dated 13 September 2022 was not challenged further.
4. According to the learned counsel for the Petitioner, proceedings under Section 73/74 of the Central Goods and Services Tax Act, 2017 (CGST) was the appropriate remedy and the account should not have been blocked. According to the learned counsel for the State, irrespective of powers under Section 73/74 of the Act, Respondents have powers under Rule 86A of the Rules to block the account so as to stop fraudulent transactions.
5. Since the order dated 13 September 2022 directing unblocking of the account was in the nature of final order and that thereafter the Petitioner has unblocked the account, it was put to learned counsel for the State that what is the implication thereof as to the course of action to be taken in the present petition, apart from question of law. Question would also be regarding returns for the next year to be filed. It is pointed out to us that action of blocking under Rule 86A(3) is for period of one year. As regards one of the suppliers, account was blocked on 21 October 2021 and other suppliers it was on 14 March 2022.
6. Respondents will file additional affidavit or give written instructions to their counsel as to whether in view of the order dated 13 September 2022, which order is not challenged, the petition has been rendered academic and whether the legal position can be kept open to be considered in an appropriate case and whether the facts of the Petitioner’s case can be examined in the proceedings under Section 74 of the Act.
7. Stand over to 20 December 2022 under the caption “For Directions”.
