Sai Ram Enterprieses Vs Pr/ADG/DGGI/ Gurugram & Anr (Delhi High Court)
Sai Ram Enterprises filed a writ petition in the Delhi High Court challenging the continued blocking of their Input Tax Credit (ITC) amounting to Rs. 3,91,23,722/- by the Directorate General of GST Intelligence (DGGI), Gurugram. The ITC was initially blocked on January 15, 2024, for the period from January 1, 2024, to November 31, 2024. However, at the time of the court hearing in April 2025, the ITC remained blocked, exceeding the one-year period stipulated by law. The petitioner argued that this prolonged blocking violated Rule 86A of the Central Goods and Services Tax Rules, 2017, which governs the conditions for using the amount available in the electronic credit ledger.
The respondents’ counsel acknowledged that the blocking might be related to an allegation that the petitioner was a non-existing firm. Nevertheless, the counsel conceded that, according to the rules, the blocking of ITC cannot extend beyond a period of one year. The relevant provision, Rule 86A(3), explicitly states that such a restriction shall cease to have effect after the expiry of one year from the date of its imposition. The court considered this statutory position and the fact that more than one year had passed since the ITC was blocked.
