2022 (1) TMI 701 - HC - GST

Unblocking of Electronic Credit Ledger - period of one year as prescribed under sub-rule 3 of Rule 86A of the CGST/GGST Rules has elapsed from the date of order of blocking of the Electronic Credit Ledger - HELD THAT - Sub-rule 3 of Rule 86A of the CGST Rules, 2017 and GGST Rules, 2017 itself has provided that the Electronic Credit Ledger can be blocked for a period of one year. On expiry of a period of one year, it would automatically get unblocked. In fact, it was the duty of the authority concerned to permit the assessee, i.e. the writ-applicant, to avail the input credit available in his ledger. Once the statutory period comes to an end, the authority has no further discretion in the matter, unless a fresh order is passed. In the case on hand, it is very unfortunate to note that despite the fact that the period of one year elapsed, the authority did not permit the writ-applicant to avail the credit available in his ledger. Even representation was filed in this regard but the authority thought fit not to pay heed to such representation. The authority did not permit the writ-applicant to avail the input credit available in his ledger for about more than two and a half months after the statutory life of the order came to an end - this writ-application is disposed of.

Issues:
1. Invocation of extraordinary writ jurisdiction under Article 226 for direction to unblock Electronic Credit Ledger after the prescribed period.
2. Interpretation of Rule 86A of the CGST/GGST Rules regarding the blocking and unblocking of Electronic Credit Ledger.
3. Failure of the authority to unblock the Electronic Credit Ledger after the expiry of the prescribed one-year period.
4. Accountability of the authority for not allowing the assessee to avail input credit despite the lapse of the statutory period.

Analysis:
1. The petitioner invoked the extraordinary writ jurisdiction under Article 226 to direct the respondent to unblock the Electronic Credit Ledger after the prescribed one-year period as per Rule 86A of the CGST/GGST Rules. The Court issued notice for final disposal and permitted service through speed post.

2. The Court noted that the Electronic Credit Ledger can be blocked for a period of one year as per the rule. After the expiry of this period, it should automatically get unblocked, allowing the assessee to avail the input credit. Despite the lapse of one year, the authority did not unblock the ledger, ignoring the petitioner's representation. The Court emphasized that the authority has no discretion once the statutory period ends unless a fresh order is passed.

3. The authority's failure to permit the assessee to avail the input credit for over two and a half months after the statutory period ended was highlighted. The Court expressed dissatisfaction with the authority's actions and emphasized the importance of timely unblocking the Electronic Credit Ledger as per the rules.

4. The Court warned that in similar cases in the future, the concerned authority would be held personally liable for any losses suffered by the assessee during the delay in unblocking the ledger. The writ-application was disposed of with a clear directive regarding the authority's accountability in such matters.

This judgment clarifies the obligations of the authority under Rule 86A of the CGST/GGST Rules regarding the blocking and unblocking of Electronic Credit Ledger and underscores the importance of timely compliance to avoid unnecessary delays for the assessee.

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