2024 (2) TMI 1466 - HC - GST

Blocking of ITC invoking Rule 86A of the CGST Act - reasons to believe - business establishment of the appellant was not functioning at the registered place as he declared - HELD THAT - The appellant was provided the opportunity to produce the documents if any to show that his business establishment was functioning at the registered place and that he was actually conducting business therein. Even though the appellant produced a few documents none of them show that he is physically occupying the building or conducting any business there. The electricity bill produced by the appellant shows that the consumption of electricity for the last month was zero. It is true that before giving Ext.P3 no explanation was sought from the appellant. However the appellant is allowed to produce documents showing his actual physical occupation of the building and running the business in it but he failed to produce the same. In these circumstances there are no reason to remit the matter to the respondents. The appeal fails and accordingly it is dismissed.

Summary

The High Court of Kerala upheld the blocking of input tax credit of a businessman trading in spices under the name "M/s Evershine Agro Spices" by the CGST department. The appellant failed to prove the functioning of his business establishment at the registered place, leading to the dismissal of the appeal challenging the blocking of credit under Rule 86A of the CGST Act. The appellant can seek permission for future credit. The appeal was dismissed.