Tvl.Krishna Impex Vs Commissioner of GST and Central Excise
Date: November 28, 2024
Court: High Court
Bench: Madras
Type: Writ Petition
Subject Matter
Any restriction on the electronic credit ledger expires after one year from its imposition under rule 86A(3)
Summary
The petitioner sought a writ petition to unblock their Input Tax Credit amounting to Rs.11,70,726, which was blocked by the GST Department on 15.04.2022 for a transaction with M/s. Sree Sathya Traders made in August 2019. The petitioner had previously filed a writ petition that successfully resulted in unblocking their ITC on 07.04.2022, only to be notified again that the ITC was blocked shortly after. - As per Rule 86A(3) of the CGST Rules, any restriction on the electronic credit ledger expires after one year from its imposition. Since the blocking occurred on 15.04.2022, the restriction was set to expire on 15.04.2023. Therefore, as the time limit had not yet lapsed, the petition was deemed infructuous, leading to the dismissal of the writ petition. The court concluded that because the blocking would soon cease, the relief sought by the petitioner was no longer necessary.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The relief sought in the present writ petition is to direct the respondents to unblock the petitioner’s Input Tax Credit (ITC) under the TNGST Act amounting to Rs.11,70,726 (blocked vide reference no.BL3304220000184 on 15.04.2022) and consequently, permit the petitioner to debit the corresponding ITC from its Electronic Credit Ledger.
2. In the present case, the GST Department had already blocked the petitioner’s ITC pertaining to the purchase made from one M/s.Sree Sathya Traders during August 2019. Aggrieved over the same, the petitioner had filed a writ petition in W.P.No.9721 of 2021, seeking to issue appropriate direction to the GST Department to unblock its ITC. Subsequently, the petitioner’s ITC was unblocked on 07.04.2022. While so, the GST Department has sent an e-mail dated 15.04.2022 to the petitioner, intimating that ITC available in petitioner’s Electronic Credit Ledger has been blocked purportedly by the 2nd respondent on 15.04.2022. After the expiry of one year’s time restriction ceases to have effect under Rule 86A(3) of the Central Goods and Services Rules, 2017 (for brevity, ‘CGST Rules, 2017). The Rule 86A(3) of the CGST Rules, 2017 reads as follows:
“86A. Conditions of use of amount available in electronic credit ledger.-
(3). Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.”
3. As per the aforesaid Rule, blocking of credit available in the electronic credit ledger of a registered tax payer will be in force for a period of only one year. Thereafter, it will expire. Since the petitioner’s ITC was blocked on 15.04.2022, it will expire on 15.04.2023. Hence, the relief sought by the petitioner has become infructuous due to efflux of time. Therefore, this writ petition is liable to be dismissed as infructuous. It is dismissed as infructuous. No costs. Consequently, connected miscellaneous petition is closed.