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2021 (2) TMI 108 - HC - GSTPrinciples of Natural Justice - no opportunity of hearing has been granted to the petitioner - case of petitioner is that Rule 86A suffers from vice of not prescribing for any procedure or opportunity of hearing for taking the drastic step of blocking the input tax credit of registered person - Validity of blocking Input Tax Credit - HELD THAT - Issue notice. Mr. Satyakam, Senior Standing Counsel accepts notice for respondent- GNCTD. Mr. Avnish Singh, Advocate accepts notice for respondent No.3-UOI. They pray and are granted six weeks time to file their respective counter-affidavit. Rejoinder, if any, be filed within a period of two weeks thereafter. List on 5th April, 2021.
Issues:
Challenge to the order blocking Input Tax Credit and Constitutional validity of Rule 86A of the CGST Rules. Analysis: 1. The petitioner challenged the order dated 10th September, 2020, which blocked Input Tax Credit in their Electronic Credit ledger. The blocked amount was specified under the CGST Act, 2017, DGST Act, 2017, and respective rules. Additionally, the Constitutional validity of Rule 86A of the CGST Rules was also contested. 2. The petitioner's counsel argued that no opportunity of hearing was provided before passing the impugned order. It was contended that Rule 86A lacked a prescribed procedure or opportunity of hearing for such a significant action of blocking input tax credit. The counsel highlighted a violation of the principle of natural justice and pointed out the absence of a similar provision under the rules framed under the Delhi Goods and Services Act. 3. On behalf of the GNCTD, it was stated that an order under Rule 86A was issued on 14th January, 2021, detailing the reasons for blocking the credit, which was duly communicated to the petitioner. The counsel mentioned the availability of a statutory remedy under Section 107 of the Act to challenge the order, suggesting that the petition should not be entertained due to an alternative efficacious remedy. 4. The petitioner's counsel disputed the claim of receiving the order, emphasizing that it had not been communicated to their client. In response, the GNCTD's counsel assured that the order would be promptly communicated to the petitioner's counsel on the same day. 5. Notice was issued, with the Senior Standing Counsel accepting notice for respondent GNCTD and the Advocate accepting notice for respondent No.3-UOI. They were granted six weeks to file their counter-affidavits, with a provision for rejoinder within two weeks thereafter. 6. The Senior Standing Counsel accepted notice on behalf of Respondents No. 4 & 5, acknowledging the filing of a counter-affidavit by the Central GST authorities, though not on record. Steps were directed to place the counter-affidavit on record, with a deadline set for filing any rejoinder to the counter-affidavit within two weeks. 7. The case was listed for further proceedings on 5th April, 2021, indicating the timeline for the next steps in the legal process.
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