One year is the statutory time upto which GST Electronic credit ledger can be blocked as per rule 86A: Gujarat HC

The Gujarat High Court in the matter of M/S EMS PROJECTS PVT. LTD. Vs. THE COMMISSIONER OF CGST ruled out that One year is the statutory time upto which GST Electronic credit ledger can be blocked as per rule 86A.

The Coram found Out that the present litigation is in a very narrow compass. The electronic credit ledger of the writ applicant No.1 came to be blocked under Rule 86A of the Central Goods and Services Tax Rules, 2017 [for short, “the Rules, 2017”]. It is not in dispute that one year period has elapsed since the ledger came to be blocked. Rule 86A of the Rules, 2017 empowers the authority to block the electronic credit ledger if the authority has reason to believe that the dealer has obtained the Input Tax Credit fraudulently or the same is ineligible.

If the period of one year i.e. the statutory time period during which the ledger can be blocked has come to an end, then, as on date, it can be said that there is no blocking of the electronic credit ledger. However, before the dealer can once again start using the Input Tax Credit accumulated in his electronic credit ledger, the authority will have to open it on the portal.

The Court held that, “We dispose of this writ application with a direction to the concerned authority to permit the writ applicant to now operate the electronic credit ledger as the original order blocking the ledger has already come to an end. Let this exercise be undertaken at the earliest and the needful shall be done in accordance with law. Direct service is permitted.”

The Judgment was made by Hon’ble Mr. Justice J.B.Pardiwala and Hon’ble Ms. Justice Nisha M. Thakore.

The Petitioner was represented by Mr. D K Trivedi and Respondent represented by Mr. Priyank P Lodha.

To Read Judgment Download PDF Given Below: