Jai Bajrang Steel Vs State of Rajasthan (Rajasthan High Court)
Jai Bajrang Steel’s input tax credit (ITC) ledger was blocked by authorities, a move challenged on the grounds it occurred prior to an appeal against an adjudication order dated August 30, 2024, rectified on November 28, 2024. The petitioner argued that the blocking happened without a hearing.
The Rajasthan High Court noted that Jai Bajrang Steel had neither paid the adjudicated tax nor filed an appeal. While Section 107 of the RGST/CGST Act allows appeals, no stay of demand was in place. The court stated that blocking the ITC ledger does not constitute recovery under Section 78 of the RGST/CGST Act, which prohibits recovery actions for three months from the demand order.
The High Court advised Jai Bajrang Steel to pursue its appellate remedy. Upon filing an appeal and submitting proof, the authorities are directed to review the decision to block the ITC ledger. The writ petition was disposed of, with the petitioner granted liberty to revive it if circumstances warrant.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Action of blocking of electronic credit ledger of ITC is challenged essentially on the ground that even before appeal against adjudication order dated 30.08.2024, rectified on 28.11.2024, could be filed, ITC ledger has been blocked.
