Kundlas Loh Udyog Vs State of H.P. & Anr. (Himachal Pradesh High Court)
ITC Blocked by Central Authority Quashed for Parallel Proceedings Bar; Blocked Input Tax Credit Set Aside Due to Lack of Jurisdiction; Parallel GST Proceedings Held Impermissible Under Section 6 of CGST Act; Summons and ITC Block Quashed for Violating Statutory Bar on Multiple Actions.
The Himachal Pradesh High Court considered a petition filed under Article 227 of the Constitution seeking quashing of a blocked Input Tax Credit (ITC) ledger dated 16 May 2024 (reflected on the portal on 20 May 2024) and summons dated 16 March 2024, on the ground of lack of jurisdiction and violation of Article 14. The petitioner, a manufacturer and distributor of iron and steel in Himachal Pradesh, asserted that it had purchased raw materials from various suppliers after satisfying the conditions under Section 16 of the CGST/HPGST Acts.
On 14 February 2024, the State tax authorities issued summons under Section 70 calling for documents relating to suppliers for the period from 1 April 2019 to 31 December 2023, which were duly furnished by the petitioner on 12 March 2024. Subsequently, on 16 March 2024, the central tax authority (DGGI) issued summons concerning five suppliers. The petitioner informed the central authority that proceedings regarding those suppliers had already been initiated by the State authority. Despite this, the central authority blocked the petitioner’s ITC under Rule 86A of the CGST Rules without further communication or hearing.
