Case Law Details
Lipika Tech Pvt Ltd Vs Deputy Commissioner (State Tax) & Ors. (Rajasthan High Court)
In the case of Lipika Tech Pvt Ltd Vs Deputy Commissioner (State Tax) & Ors., the Rajasthan High Court addressed the blocking of the Electronic Credit Ledger (ECrL) under Rule 86A of the CGST Rules. The jurisdictional range officer had blocked Lipika Tech Pvt Ltd’s Input Tax Credit (ITC) without giving the company an opportunity to be heard, despite the assessee’s active participation in an ongoing investigation initiated by the enforcement wing. The assessee, represented by legal counsel, argued that this action was outside the officer’s jurisdiction and violated the principles of natural justice, as no formal order had been passed following the company’s response to a prior notice.
The Rajasthan High Court found prima facie merit in the petitioner’s argument and issued a stay on the order blocking the ITC. The Court observed that the blocking of the credit without granting a hearing violated due process. Consequently, the Court stayed the effect of the impugned order that had blocked ITC amounting to Rs. 6,62,776 for the period of August 2024, pending further submissions from both sides. The respondents have been granted three weeks to file a reply, with a week thereafter to submit a rejoinder, and the case is listed for a hearing after four weeks.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
Mr. Sandeep Taneja, learned Additional Advocate General appears and takes notice for respondent Nos. 1 to 4.
Ms. Vartika Mehra, learned counsel appears and takes notice for respondent No.5.
Three weeks’ time is granted to file reply.
One week time is thereafter granted to file rejoinder.
List after four weeks.
In the meanwhile, taking into consideration that though the petitioner had responded to notice dated 18.07.2024 proposing to block his input tax credit and also submitted his reply on 24.07.2024 followed by additional submissions but without passing any order on the same, another authority has blocked ITC without giving any opportunity of hearing, the effect and operation of Annexure-P/8 whereby the respondents have blocked the ITC of Rs.6,62,776/- as uploaded in GSTIN:08AAFCL1811Q1Z8 in the name of M/s Lipika Tech Private Limited for the period 01.08.2024 to 31.08.2024, shall remain stayed.
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