Blocking of E-Credit Ledger Under CGST Rule 86A Upheld with Sufficient Evidence

Graphic Trades Private Limited Vs State of Bihar (Patna High Court)

Blocking of Electronic Credit Ledger under Rule 86A of CGST Rules upheld due to availability of sufficient evidences

Patna High Court held that blocking of Electronic Credit Ledger justified since there is sufficient material before department to satisfy with regard to necessity of passing an order under rule 86-A(1) of the CGST Rules, 2017. Accordingly, order blocking Electronic Credit Ledger upheld.

Facts- The petitioner company is engaged in business of providing end to end solutions in the field of Information Technology. A search carried out at the principal place of business of M/s TDML Services Private Limited. Respondent No. 3 informed the respondent no. 4 that after investigation the said entity was found non-existent at the principal place of business. Respondent No. 3 directed respondent 4 to take appropriate action against the petitioner who is in the recipient’s list of M/s TDML Services Private Limited and had availed the benefit of input tax credit unlawfully. With the writ application the decision of the respondent no. 4 has not been enclosed and it is not specifically under challenge but a direction has been sought for against respondent nos. 3 and 4 to unblock the ITC lying in the Electronic Credit Ledger of the petitioner amounting to Rs. 1,18,42,455/-.