2022 (9) TMI 482 - HC - GST

Provisional attachments - unblocking of ITC - non-processing Petitioner s refund application - HELD THAT - In Paragraph 5 of the Affidavit of Vinayak Azaad, affirmed on 7th September 2022, there is an averment that credible intelligence exist on file and Petitioner has availed illegal and ineligible input credit from its vendors and one such vendor had also been arrested by the CGST, Delhi, North Commissionerate. Mr. Raichandani states that since the copy of the Affidavit has been handed over to him in the Court when the matter was called out, there has been no time to file Affidavit of Petitioner denying these allegations. At the same time, Mr. Raichandani, on instructions, states that Petitioner has not availed of any illegal and ineligible input credit from any vendors. Mr. Raichandani states that the entry from the vendor Vikram Goel has been reversed by Petitioner at a great loss to Petitioner under protest and, therefore, it should be a non issue. Petition disposed off.

Summary

Issues involved:
1. Error in judgment by the Commissioner
2. Provisional attachments raised by the Commissioner
3. Blocking of Input Tax Credit (ITC) of the Petitioner
4. Impact on Customs Authorities processing refund application
5. Allegations of availing illegal and ineligible input credit by the Petitioner

Analysis:
1. The judgment addresses an error in judgment made by the Commissioner, who admitted the mistake and tendered an unconditional apology. The Court accepted the apology, acknowledging the error on the Commissioner's part.

2. The Commissioner raised two provisional attachments, which were subsequently withdrawn. The Court directed suitable communication to be sent to the concerned banks to unblock the ITC credit of the Petitioner promptly.

3. The Court noted the blocking of ITC credit of the Petitioner and directed the Joint Commissioner of State GST, Maharashtra to unblock the credit within 24 hours, emphasizing the importance of prompt action in such matters.

4. The Petitioner raised a grievance regarding the impact of the Commissioner's actions on the Customs Authorities processing the refund application. The Court directed the Customs Authorities to process the refund application within two weeks and pass appropriate orders, clarifying that no observations were made on the merits of the application.

5. Allegations were made regarding the Petitioner availing illegal and ineligible input credit. The Petitioner denied these allegations, stating that any such entry had been reversed under protest. The Court emphasized the need for investigations to be conducted in accordance with the law and due process, warning against arbitrary actions.

Overall, the petition was disposed of with no order as to costs, highlighting the importance of following due process and avoiding arbitrary actions in such matters.