9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 1022 - HC - GSTUnblocking of Input Tax Credit Account - case of petitioner is that the proceedings under Section 73/74 of the Central Goods and Services Tax Act, 2017 (CGST) was the appropriate remedy and the account should not have been blocked - HELD THAT - Since the order dated 13 September 2022 directing unblocking of the account was in the nature of final order and that thereafter the Petitioner has unblocked the account, it was put to learned counsel for the State that what is the implication thereof as to the course of action to be taken in the present petition, apart from question of law. Question would also be regarding returns for the next year to be filed. It is pointed out to us that action of blocking under Rule 86A(3) is for period of one year. As regards one of the suppliers, account was blocked on 21 October 2021 and other suppliers it was on 14 March 2022. Stand over to 20 December 2022 under the caption For Directions .
Issues: Petition seeking direction to unblock Input Tax Credit Account and refund, interpretation of Section 73/74 of CGST Act, powers under Rule 86A to block accounts, implications of unblocking account, academic nature of petition post unblocking, consideration of facts under Section 74.
Analysis: 1. The Petitioner filed a petition seeking a direction to unblock the Input Tax Credit Account related to an entry of Rs. 81,68,812/- and requested further directions on refund. The Division Bench, in an order dated 13 September 2022, granted time to the Respondent to file a reply. The Petitioner expressed readiness to face prosecution if the petition failed. Subsequently, the Respondents informed that the ledger account was unblocked, and the Petitioner utilized the Input Tax Credit. The order of unblocking was not challenged further, and the Petitioner filed returns after unblocking the account. 2. The crux of the matter revolved around the interpretation of Section 73/74 of the Central Goods and Services Tax Act, 2017 (CGST) concerning the appropriate remedy for the situation. The Petitioner's counsel argued that the account should not have been blocked, citing the provisions of the Act. Conversely, the State's counsel contended that under Rule 86A of the Rules, the Respondents had the authority to block the account to prevent fraudulent transactions, irrespective of the powers under Section 73/74. 3. The Court deliberated on the implications of the unblocking of the account, considering it as a final order. The State was asked about the course of action post unblocking, including the filing of returns for the subsequent year. It was noted that the blocking under Rule 86A(3) had a duration of one year, with accounts of different suppliers being blocked on specific dates. The Respondents were directed to provide additional information on whether the petition had become academic post unblocking and if the facts could be examined under Section 74 of the Act in the future. 4. The case was adjourned to 20 December 2022 for further directions, emphasizing the need to address the academic nature of the petition and the potential consideration of the Petitioner's case under Section 74. The Court aimed to clarify the legal position and the future course of action in light of the unblocking of the Input Tax Credit Account and the subsequent utilization of the credit by the Petitioner.
|
