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The Hon’ble Karnataka High Court in the case of S. A. Enterprises held that blocking the Electronic Credit Ledger (“ECrL”) by a mere text message without providing the Petitioner a pre-decisional hearing, and without independent cogent reasons based on “reasons to believe,” is illegal and liable to be quashed.
On the recommendation of National Coordination Committee, Second Special All India drive against fake GST Registration is being conducted by all Central and State Tax Authorities from 16th August, 2024 to 15th October, 2024
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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.
The Hon’ble Patna High Court in Graphic Trades Pvt. Ltd. disposed of the Writ Petition and upheld the blocking of ITC under Rule 86A of the Bihar GST Rules, as the authorities had sufficient material indicating the petitioner received ITC from a non-existent supplier.
The recent judgment of the Madras High Court in the case of Tvl. Skanthaguru Innovations Private Limited has sparked a new debate as to whether the revenue department can make the balance of ECL negative by exercising the power of Rule 86A of the CGST Rules.
The Hon’ble Madras High Court in the case of Tvl. Shanthaguru Innovations Private Limited v. Commercial Tax Officer & Ors. [Writ Petition No. 29872 of 2024 dated November 28, 2024] dismissed the case and held that the negative blocking is well within the scope of provisions of Rule 86A of the Central Goods and Service Tax Rules, 2017 (“the CGST Rules”).
The Honorable Orissa High Court in the case of Atulya Minerals dismissed the writ petition interalia stating that the Circular issued by the Central Government would be binding on the officers of Central GST officers only.
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.
The Honorable Telangana High Court in Laxmi Fine Chem held that in case assessee has wrongly or fraudulently availed input tax credit, the Revenue department should initiate appropriate recovery proceedings under section 73 or 74 of the CGST Act, 2017, rather than invoking Rule 86(A) of the CGST Rules, 2017.