Lipika Tech Pvt Ltd Vs Deputy Commissioner (State Tax)
Date: October 17, 2024
Court: High Court
Bench: Rajasthan
Type: Writ Petition
Subject Matter
Electronic Credit Ledger blocking under rule 86A stayed for not issuing a formal order
Summary
In the case of Lipika Tech Pvt Ltd vs. Deputy Commissioner (State Tax), the Rajasthan High Court examined the legality of blocking the Input Tax Credit (ITC) belonging to Lipika Tech under Rule 86A of the CGST Rules. The blocking occurred without providing the company an opportunity to be heard during an ongoing investigation. The court noted that the jurisdictional officer had restricted the ITC based on preliminary actions without issuing a formal order following the petitioner’s previous communications regarding the issue. This was seen as a violation of the principles of natural justice. The High Court found merit in the petitioner’s argument and issued a stay on the order, effectively allowing the company to access the blocked ITC amounting to Rs. 6,62,776 for the unspecified period. The court scheduled future proceedings with timelines for replies and rejoinders from both parties, underscoring the importance of due process in tax-related matters.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
Mr. Sandeep Taneja, learned Additional Advocate General appears and takes notice for respondent Nos. 1 to 4.
Ms. Vartika Mehra, learned counsel appears and takes notice for respondent No.5.
Three weeks’ time is granted to file reply.
One week time is thereafter granted to file rejoinder.
List after four weeks.
In the meanwhile, taking into consideration that though the petitioner had responded to notice dated 18.07.2024 proposing to block his input tax credit and also submitted his reply on 24.07.2024 followed by additional submissions but without passing any order on the same, another authority has blocked ITC without giving any opportunity of hearing, the effect and operation of Annexure-P/8 whereby the respondents have blocked the ITC of Rs.6,62,776/- as uploaded in GSTIN:08AAFCL1811Q1Z8 in the name of M/s Lipika Tech Private Limited for the period 01.08.2024 to 31.08.2024, shall remain stayed.