The Gujarat High Court has held that the Electronic Credit Ledger can be blocked for 1 year and it would automatically get unblocked beyond 1 year.
The writ-applicant, Ambika Creation has invoked the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India and has prayed for a direction to the respondent to unblock the Electronic Credit Ledger, more particularly, when the period of one year as prescribed under sub-rule 3 of Rule 86A of the CGST/GGST Rules has elapsed from the date of order of blocking of the Electronic Credit Ledger.
The AGP Mr.Utkarsh Sharma has appeared on behalf of the respondent authorities and has fairly stated that the period of one year has elapsed in terms of sub-rule 3 of Rule 86A of the CGST Rules, 2017 and GGST Rules, 2017.
The division bench of Justice J.B.Pardiwala and Justice Nisha M. Thakore noted that the rule itself has provided that the Electronic Credit Ledger can be blocked for a period of one year. On expiry of a period of one year, it would automatically get unblocked. In fact, it was the duty of the authority concerned to permit the assessee, i.e. the writ-applicant, to avail the input credit available in his ledger. Once the statutory period comes to an end, the authority has no further discretion in the matter, unless a fresh order is passed. In the case on hand, it is very unfortunate to note that despite the fact that the period of one year elapsed, the authority did not permit the writ-applicant to avail the credit available in his ledger. Even representation was filed in this regard but the authority thought fit not to pay heed to such representation.
“We may further note that the authority did not permit the writ-applicant to avail the input credit available in his ledger for about more than two and a half months after the statutory life of the order came to an end. We make it clear that next time if we come across such a case, then the concerned authority would be held personally liable for the loss which the assessee might have suffered during the interregnum period,” the court said.
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