Restriction imposed under Rule 86A will cease to have effect after the expiry of period of one year from the date of imposing such restriction. Since that period of one year has been elapsed in instant case, this court directed the respondents to de-block the Input Tax Credit and permit the petitioners to utilize the Input Tax Credit.
Rule 86A of the CGST Rules, 2017- Blocking of ITC -- The petitioner challenged Rule 86-A of Rules insofar as it empowers authorities to block the ITC of the registered recipient. The petitioner counsel submitted that as the account was blocked on 28.01.2020, the period of one year now having expired, blocking of the account will cease to have effect but the account continues to be remained blocked and the respondents are not unblocking the account of the petitioners. The court observed that Rule 86-A (3) is very specific to the effect that the restriction imposed will cease to have effect after the expiry of period of one year from the date of imposing such restriction. There being no dispute that period of one year having elapsed from the date of restriction imposed in the form of blocking the Input Tax Credit.
Held that:- The Hon’ble High Court directed the respondents to de-block the Input Tax Credit and permit the petitioners to utilize the ITC of Rs. 2,40,76,129/- blocked in Electronic Credit Ledger on 28.01.2020, within a period of 7 days. Listed the case after six weeks.
Restriction imposed under Rule 86A will cease to have effect after the expiry of period of one year from the date of imposing such restriction. Since that period of one year has been elapsed in instant case, this court directed the respondents to de-block the Input Tax Credit and permit the petitioners to utilize the Input Tax Credit.
Rule 86A of the CGST Rules, 2017- Blocking of ITC -- The petitioner challenged Rule 86-A of Rules insofar as it empowers authorities to block the ITC of the registered recipient. The petitioner counsel submitted that as the account was blocked on 28.01.2020, the period of one year now having expired, blocking of the account will cease to have effect but the account continues to be remained blocked and the respondents are not unblocking the account of the petitioners. The court observed that Rule 86-A (3) is very specific to the effect that the restriction imposed will cease to have effect after the expiry of period of one year from the date of imposing such restriction. There being no dispute that period of one year having elapsed from the date of restriction imposed in the form of blocking the Input Tax Credit.
Held that:- The Hon’ble High Court directed the respondents to de-block the Input Tax Credit and permit the petitioners to utilize the ITC of Rs. 2,40,76,129/- blocked in Electronic Credit Ledger on 28.01.2020, within a period of 7 days. Listed the case after six weeks.