Rawman Metal & Alloys Vs Deputy Commissioner of State Tax (Bombay High Court)
Bombay High Court held that invocation of provisions of Rule 86-A of the Central Goods and Services Tax Rules, 2017 and blocking of Input Tax Credit not justified since Input Tax Credit available in Electronic Credit Ledger was ‘NIL’. Accordingly, petition is allowed.
Facts- The Petitioner challenges the impugned order dated 9 December 2024 made by the Respondent purporting to invoke the provisions of Rule 86-A of the Central Goods and Services Tax Rules, 2017 (CGST Rules) to block the use of Input Tax Credit (ITC) in the Petitioner’s Electronic Credit Ledger to the extent of Rs. 12,84,273/-. Admittedly, at the time when the impugned order dated 9 December 2024 was made, the ITC available in the Petitioner’s Electronic Credit Ledger was “Nil”.
Conclusion- Held that this Petition must succeed, and the impugned blocking notice must be quashed and set aside. As noted earlier, there is no dispute that as on the date of issuance of the impugned notices or the blocking orders, the ITC in the Petitioner’s Electronic Credit Ledger was “Nil”. Therefore, the powers under Rule 86-A could not have been exercised to block the ITC, which was not even available in the Petitioner’s Electronic Credit Ledger on the date when the satisfaction was recorded or the impugned blocking orders made.
