Yes, the Honorable Orissa High Court in the case of Atulya Minerals v. Commissioner of State Tax [W.P.(C) No. 14540 of 2024 dated June 20, 2024] 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 Honorable Orissa High Court stated as it appears, the orders impugned relates to State GST and the same having been passed by the Deputy Commissioner of the State Taxes, the Contention raised that he has no jurisdiction to pass the order, cannot be a justifiable ground in view of Rule 86 A(1) of the OGST Rules, 2017.
Rule 86 (A)(1) makes clear that the Commissioner or an officer authorized by him in this behalf, not below the rank of an Assistant Commissioner, can pass the order and in the instant case, the impugned orders having been passed by the Deputy Commissioner, who is higher in rank to Assistant Commissioner, it is well within his jurisdiction to pass such orders. The Honorable Court further stated that in so far as the contention raised with regard to the Circular issued by CBIC dated 02.11.2021 is concerned, that ipso facto can only be applicable to the Central GST and not to the State GST unless the said circular is adopted by the State Government by making a declaration. Nothing has been placed on record to show that the said circular has been adopted by the State Government for State GST.
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Therefore, the Honorable Court ruled that the claim of the petitioner that Impugned orders have been passed by an officer having no jurisdiction cannot be sustained in eyes of law. So far as compliance of principle of natural justice is concerned the same has already been set at rest by this Court in the case of M/s. Bizzare Ispat Pvt. Ltd. and M/s. Innojet Projects Pvt. Ltd., Khordha, and accordingly writ petition is disposed of.
Author’s Comments
Rule 86(A)(1) clearly states that the Commissioner or an officer authorized by him in this behalf, not below the rank of Assistant Commissioner has the power to block the electronic credit ledger for reasons to be recorded in writing. In this case, power has been exercised by the Deputy Commissioner, who is higher in rank to the Assistant Commissioner. And challenge to jurisdiction lacks persuasive value.
There are only five (5) reasons for which this pre-emptive and emergency power under Rule 86A can be invoked. And if there are any other reasons, not falling with these, the use of this exceptional power would be contrary to law. Blocking the use of input tax credit, which is a vested and indefeasible right in the nature of the property of a Registered Person, would be institutionalized theft. Passion to protect the interests of Revenue does not authorize bypassing the law. The petitioner should have called reasons to believe by the Authorized officer for this preemptive action and in case of any lapses, approaching Writ court would have been a better strategy. Moreover, the decision by the Commissioner or any other authorized officer under Rule 86 to block ECL is a non-appealable decision, although not specified u/s 121 of the Act.
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