Petitioner seeks a direction declaring the continuance of blocking of petitioner’s ITC of INR 8,72,22,741/- beyond a period of one year as illegal on account of violation of express mandate of Rule 86A(3) and to unblock and restore the credit of the petitioner.
Rule 86A of the CGST Rules, 2017— Blocking of ITC -- The petitioner challenged Rule 86A of the Rules as illegal, arbitrary and bad in law. The Petitioner sought a direction declaring the continuance of blocking of petitioner’s ITC of INR 8,72,22,741/- beyond a period of one year as illegal and to unblock and restore the credit of the petitioner. The counsel for the petitioner submitted that Rule 86A(3) mandates that any restriction on the usage of ITC shall cease to have effect after the expiry of a period of one year. However in the present case, despite the period of one year having lapsed on 25th January, 2021, the respondent has not unblocked the ITC. Despite the letters written by the petitioner on 15th June 2021 and 17th September, 2021 to the respondent, the respondent has neither provided a response justifying the blocking of ITC nor has unblocked the ITC.
Held that:- The Hon’ble High Court issued notice. Directed the respondent to decide the representations/letters by way of a reasoned order in accordance with law within four weeks.
Petitioner seeks a direction declaring the continuance of blocking of petitioner’s ITC of INR 8,72,22,741/- beyond a period of one year as illegal on account of violation of express mandate of Rule 86A(3) and to unblock and restore the credit of the petitioner.
Rule 86A of the CGST Rules, 2017— Blocking of ITC -- The petitioner challenged Rule 86A of the Rules as illegal, arbitrary and bad in law. The Petitioner sought a direction declaring the continuance of blocking of petitioner’s ITC of INR 8,72,22,741/- beyond a period of one year as illegal and to unblock and restore the credit of the petitioner. The counsel for the petitioner submitted that Rule 86A(3) mandates that any restriction on the usage of ITC shall cease to have effect after the expiry of a period of one year. However in the present case, despite the period of one year having lapsed on 25th January, 2021, the respondent has not unblocked the ITC. Despite the letters written by the petitioner on 15th June 2021 and 17th September, 2021 to the respondent, the respondent has neither provided a response justifying the blocking of ITC nor has unblocked the ITC.
Held that:- The Hon’ble High Court issued notice. Directed the respondent to decide the representations/letters by way of a reasoned order in accordance with law within four weeks.