Governing rule empowered Commissioner or officer authorized by him not below Assistant Commissioner to block ITC
Petitioner-assessee challenged departmental blocking of ITC in electronic credit ledger –
Tag: blocking of ECL
Negative blocking of ITC under Rule 86A is impermissible – only available credit can be blocked
The Hon’ble Bombay High Court in the case of Hemang Bipin Varaiya held that negative blocking of ITC under Rule 86A of the CGST Rules, 2017 is not permissible as the Rule mandates ‘the existence of available credit in the ECL.
Mandatory Requirement of Written ‘Reasons to Believe’ Under Rule 86A for Blocking Input Tax Credit (ITC)
The Hon’ble Allahabad High Court in the case of Pilcon Infrastructure Pvt. Ltd. held that blocking of Input Tax Credit under Rule 86A of the U.P. GST Rules without recording specific, written ‘reasons to believe’ linking the assessee to fraudulent transactions is without jurisdiction and illegal, emphasizing that mere reliance on ex parte communications or generic alerts from DGGI does not fulfil the statutory requirement.
Negative Blocking of ITC Beyond 10% of Tax Demand Under Rule 86A Not
Article, GST Article, High Court
Supreme Court Upholds Delhi HC Ruling: Negative Balance in ECL Cannot Be Blocked Under Rule 86A of the CGST Rules
The Hon’ble Supreme Court in the case of Deputy Director, DGGI, DZU & Ors held that no interference was warranted vide exercise of jurisdiction under Article 136 of the Constitution of India and dismissed the SLP challenging the Delhi HC’s ruling against negative blocking of Electronic Credit Ledger.
Revenue Department not empowered to block ITC in excess of credit available in the Electronic Credit Ledger
The Hon’ble Delhi High Court in the case of Best Crop Sciences Private Limited held that the Revenue Department is not empowered to block ITC in excess of the credit available in the ECL under Rule 86A of the CGST Rules stating that in case where the credit of input tax is not available in the ECL or the credit has already been utilised, Rule 86A of the CGST Rules cannot be invoked.
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HC set aside order blocking credit ledger of petitioner which was passed by an Officer of rank below Asst. Commissioner