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TMI Blog2023 (10) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... by the State Tax Officer is neither in consonance with the observations as made by the very officer in the impugned order providing for an opportunity to the petitioner to make out a case against such blocking of input tax credit, as also the same would be contrary to the provisions of Rule 86-A (2) of the CGST / MGST Rules, which itself provides that the Commissioner or the Officer authorized by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger, no longer exist, allow such debit - Sub-rule (2) of Rule 86-A therefore certainly provides for a window or an opportunity available to the assessee to make out a case against the action of the department to disallow the benefit of credit to the assessee. The order dated 10 April, 2023 passed by the State Tax officer, being roznama order, rejecting the petitioner s objection is quashed and set aside - Petition disposed off. - G. S. KULKARNI JITENDRA JAIN, JJ. For the Petitioner : Mr. Bharat Raichandani a/w. Mr. Prathamesh Gargate. For the Respondent : Ms. Shruti D. Vyas, AGP for the State. ORAL JUDGMENT (PER. G. S. KULKARNI, J.) 1. Rule, made returnable forthwith. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligibility to use such blocked credit, this order will be withdrawn either partially or fully, depending on the evidence produced by you. Also depending on changes in factual matrix in electronic records on common portal, suo moto modification in this order will be executed as may be found needful. ORDER M/s. ASHAPURA STEEL METAL (VELARAM VIRAJI CHOUDHARY) holding GSTN27AFKPC7447NIZX has availed input tax credit fraudulently during the period of 2021-22 2022-23 and the same is apparent on the records. Therefore, Input Tax credit availed fraudulently at Rs. 23,76,520.88 under the CGST and Rs. 23,76,520.88 availed under head SGST is blocked under the provisions of Section 86A of CGST/MGST Act, 2017. 4. Mr. Raichandani, learned counsel for the petitioner in assailing the impugned order has mounted a two fold challenge. The first challenge is on the ground that the State Tax Officer (Respondent No. 2) who is an officer under the State machinery and appointed under the MGST Act would not have jurisdiction to block the credit under the CGST Act, as he would have jurisdiction only under the MGST Act. In support of such contention, Mr. Raichandani has placed reliance on the provisions un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic credit ledger has been fraudulently availed or is ineligible in as much as,- a) The credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36, - (i) issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or (ii) without receipt of goods or services or both; or b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or d) the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of Section 5 of the Maharashtra Goods and Services Tax Act, 2017 (Mah.XLIII of 2017), the Commissioner of State Tax, Maharashtra State, hereby pleased to delegate the powers and duties conferred or imposed upon the Commissioner, to all the Deputy Commissioners of State Tax, to all the Assistant Commissioners of State Tax and to all the State Tax Officers, for carrying out the purposes under sub-rule (1) and (2) of Rule 86A of Maharashtra Goods and Services Tax Rules, 2017. The powers and duties delegated under this order shall be exercised within their jurisdiction subject to such conditions and restrictions as the Commissioner may impose from time to time. sd/- Commissioner of State Tax Maharashtra State, Mumbai. 8. Ms. Vyas would also submit that the contention as urged on behalf of the petitioner that the State Tax Officer would not have jurisdiction to block the credit under the CGST Act would not be correct, also in view of the clear provisions of Section 6 of the CGST Act, which provides for Authorization of officers of State Tax or Union Territory Tax, as proper officer in certain circumstances . We may note the provisions of Section 6 of the CGST Act, which reads thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 5 - Powers of Officers (1) Subject to such conditions and limitations as the Commissioner may impose, an officer of State tax may exercise the powers and discharge the duties conferred or imposed on him under this Act. (2) An officer of State tax may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of State tax who is subordinate to him. (3) The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. (4) Notwithstanding anything contained in this section, an Appellate Authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of State tax. 10. Ms. Vyas has also drawn our attention to the provisions of Section 6 of the MGST Act, which provides for Authorization of Officers of central tax as proper officer in certain circumstances , which is a mirror provision equivalent to what Section 6 of the CGST Act would provide in respect of State officers. 11. Thus, referring to the aforesaid provisions, Ms. Vyas would contend that the State tax officer would be the officer wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to block the input tax credit in a given situation. It would bring about an incongruity if the State Tax Officer is not recognized to exercise powers under Rule 86-A of the CGST Rules when he is permitted to do so under Rule 86 A of the MGST Rules. 15. Thus, on a cumulative reading of the statutory scheme as brought about by these provisions and rules, in our opinion such provisions as conferring powers on the State Officers under the CGST Act are required to be read harmoniously. It cannot be conceived that the intention in framing Rule 86-A of the CGST Rules would be to denude the powers which are conferred on the State Tax Officer to exercise powers under Rule 86A as permitted by Section 5 of the MGST Act read with a clear authorization under Section 6 of the CGST Act. 16. For the above reasons, we are unable to persuade ourselves to agree with Mr. Raichandani when he contends that the State tax officer did not have the jurisdiction to pass the impugned order invoking Rule 86-A of the CGST Rules. 17. In such context, Mr. Raichandani has also brought to our notice the orders of the Division Bench of this Court, Bench at Nagpur in Writ Petition No. 5645 of 2022 (Guru Storage Bat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner on merits have been addressed by the State Tax Officer. In fact what the State Tax Officer has observed is that the petitioner has a remedy of appeal under section 107(1) of the CGST/MGST Act if the petitioner was to be aggrieved by the decision of the State Tax Officer on the orders passed under Rule 86A of the CGST/MGST Rules, 2017. 19. In our opinion, the order as passed by the State Tax Officer is neither in consonance with the observations as made by the very officer in the impugned order providing for an opportunity to the petitioner to make out a case against such blocking of input tax credit, as also the same would be contrary to the provisions of Rule 86-A (2) of the CGST / MGST Rules, which itself provides that the Commissioner or the Officer authorized by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger, no longer exist, allow such debit. Sub-rule (2) of Rule 86-A therefore certainly provides for a window or an opportunity available to the assessee to make out a case against the action of the department to disallow the benefit of credit to the assessee. 20. For the aforesaid reasons, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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