ITC Blocking under Rule 86A – Madras HC Upholds Department’s Power

Kalaimahal Cements Private Limited Vs Commercial Tax Officer (Madras High Court) The Madras High Court recently delivered an important ruling on blocking of Input Tax Credit (ITC) under Rule 86A of the CGST Rules. The Court dismissed the writ petition filed by the taxpayer and upheld the department’s action of blocking ITC where fraudulent availment of credit was suspected. This decision reiterates that Rule 86A is a powerful anti-evasion tool available to tax authorities when there is credible evidence suggesting fraudulent ITC claims. Background of the Case The petitioner challenged the bl...