Lazard Infrastructure LLP Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
Summary: Karnataka High Court allowed the writ petition filed by M/s Lazard Infrastructure LLP challenging the blocking of Input Tax Credit [ITC] amounting to Rs.3,81,407/-. The petitioner, a Limited Liability Partnership engaged in providing construction services to different industrial establishments, produced screenshots of the portal to contend that its ITC had been blocked without any notice or pre-decisional hearing. The learned High Court Government Pleader appearing for the respondent did not dispute that no intimation regarding the possibility of blocking ITC had been issued to the petitioner and that no pre-decisional hearing had been extended.
The respondent, however, placed on record a communication addressed by the Central GST Authorities stating that the petitioner had been identified as one of the entities which had received services from a non-existent entity and that action was required to ensure that suppliers and recipients did not take advantage of ITC. The High Court observed that the communication issued by the Central GST Authorities was only to act as fit upon verification. Since the decision to block ITC of Rs.3,81,407/- was admittedly taken without intimation or a pre-decisional hearing, the Court found reason to interfere. The Court directed the respondent to immediately unblock the ITC of Rs.3,81,407/- upon receipt of a certified copy of the order.
