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TMI Blog2021 (9) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... des that a registered dealer would be eligible for claiming input tax credit on the goods purchased on the condition that subject to the provisions of Sections 41 and 43A of the Act, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of such supply. The case of the petitioner is that having paid CGST on the purchases made from a registered dealer, the petitioner thereafter has no control over the seller to ensure that such tax is deposited with the Government revenue as is statutorily is his obligation. Denying to the petitioner input tax credit on such purchases on which the petitioner has already paid tax on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any case the attachment should have been lifted which so far has not been done. The issues require consideration. Hence, rule. Since legislation framed by the Parliament is under challenge, let there be notice to the learned Attorney General. Learned Asstt. Solicitor General Mr. Bidyut Majumder waived notice on behalf of respondent No.1, Union of India, as well as the learned Attorney General. Learned counsel Mr. Paramartha Datta waived notice on behalf of respondents No.2 and 3. For the limited purpose of considering the petitioner's request for interim relief for removing attachment of the Tax Credit Account, let notice be returnable on 23.08.2021." Today we have heard learned counsel for the parties on interlocutory application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-in-reply filed. It is contended that the petitioner has claimed tax credit without the tax being deposited with the Government revenue. In order to safeguard the interest of the revenue, therefore, the Commissioner had exercised powers under Rule 86A of the said rules. Chapter IX of the said Rules pertains to payment of tax. Rule 86 refers to electronic credit ledger which shall be maintained in relation to the registered dealer where his eligible input tax credit would be accumulated for the purpose of discharging his tax liability to the Government. Rule 86A however provides conditions of use of amount available in such electronic credit ledger. As per sub-rule (1), the Commissioner or an officer authorized by him in this behalf, havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing. Sub-rule (3) of Rule 86A clearly brings about this legislative intent while it provides that such restrictions shall cease to have effect after the expiry of a period of one year. Two things are significant in this sub-rule; first, there is no scope of extension of this time and secondly, upon expiry of a period of one year the effect of the restriction seizing to take effect would be automatic. Under the circumstances, department cannot continue to subject the petitioner's electronic credit ledger to the restrictions imposed by the Commissioner, on 21st May 2020. The same shall be released. In other words, it would be open for the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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