2023 (9) TMI 767 - HC - GST

Blocking of Input Tax Credit - one year period prescribed under Rule 86A(3) of the CGST Rules has expired - HELD THAT - Considering the fact that the petitioner proposes to file an appeal before the Appellate Authority, liberty is given to the petitioner to deposit 10% of the amount confirmed vide order dated 08.08.2023 through electronic cash register. The petitioner shall also file an appeal against the aforesaid order within a period time prescribed under Section 107 of the TNGST Act, 2017. The credit amount of Rs. 37,71,590/- that has been blocked shall be unblocked subject to the petitioner depositing 10% of the amount confirmed vide order dated 08.08.2023. It is made clear that if the petitioner fails to file an appeal within the statutory period prescribed under Section 107 of the TNGST Act, 2017, the respondent is at liberty to block the aforesaid credit amount that may be lying unutilized in the electronic credit ledger of the petitioner. Petition closed.

Summary

Issues involved:
The judgment involves the blocking of Input Tax Credit for multiple petitioners and the expiration of the one-year period prescribed under Rule 86A(3) of the CGST Rules.

Blocking of Input Tax Credit:
The Input Tax Credit of the petitioners was blocked, with specific amounts and blocking dates provided for each petitioner. For writ petitions where the one-year period had expired, it was noted that the credit should be unblocked. The Additional Advocate General confirmed this, resulting in the closure of those writ petitions without costs. The respondents were directed to unblock the credit, with the liberty to issue notices under Section 73/74 of the TNGST Act, 2017.

Specific Case - Writ Petition at Sl.No.1:
In the case of the first writ petition listed, the credit amount was blocked on a specific date, with the due date for unblocking set for a later date. Despite the passing of an Assessment Order, the petitioner intended to file an appeal against it. The petitioner was granted liberty to deposit 10% of the confirmed amount and file an appeal within the prescribed time under Section 107 of the TNGST Act, 2017. The blocked credit amount would be unblocked upon compliance, with a warning of potential reblocking if an appeal was not filed within the statutory period.

Conclusion:
The judgment resulted in the unblocking of Input Tax Credit for petitioners where the one-year period had expired, closure of related writ petitions, and specific instructions for the petitioner in the first case to file an appeal and comply with deposit requirements to unblock the credit amount. The judgment aimed to ensure compliance with statutory provisions while providing necessary legal recourse for the concerned parties.