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2022 (4) TMI 916 - HC - GSTBlocking of Input Tax Credit (ITC) - Validity of Rule 86A of the Uttar Pradesh Goods and Services Tax Rules, 2017 - HELD THAT - Learned Counsel for the petitioner states that the petitioner does not intend to press challenge to the validity of Rule 86A of the Rules - the order blocking the Input Tax Credit upto ₹ 2,67,16,352/- available in the Electronic Credit Ledger of the petitioner came to an end on its own, by operation of law, on 9-7-2021. No other order has been shown as may allow the Input Tax Credit to remain blocked beyond 9-7-2021. The present writ petition stands disposed of.
Issues:
Challenge to the validity of Rule 86A of the Uttar Pradesh Goods and Services Tax Rules, 2017. Blocking of Input Tax Credit (ITC) up to ?2,67,16,352 in the Electronic Credit Ledger. Analysis: Challenge to Rule 86A Validity: The writ petition was initially filed to challenge the validity of Rule 86A of the Uttar Pradesh Goods and Services Tax Rules, 2017. However, during the proceedings, the petitioner's counsel informed the court that they no longer intended to press the challenge to the validity of Rule 86A. Consequently, the court declined the petitioner's prayer challenging the validity of the said rule. Blocking of Input Tax Credit: The order dated 10-7-2020 had blocked the petitioner's Input Tax Credit (ITC) up to ?2,67,16,352 in the Electronic Credit Ledger. The court noted that as per sub-rule (3) of Rule 86A, the life of the direction to block the ITC was limited to one year from the date of issuance, which meant it automatically expired on 9-7-2021. The court emphasized that no further order had been presented to justify the continued blocking of the ITC beyond the specified date. Conclusion: Given the automatic expiration of the order blocking the Input Tax Credit on 9-7-2021, the court disposed of the writ petition. The judgment declared that the order blocking the ITC had ceased to have effect by operation of law. The parties were left with the option to pursue any further legal action permitted by law concerning the blocked Input Tax Credit of ?2,67,16,352.
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