A division bench of the Gujarat High Court has directed the GST department to withdraw the negative block of the electronic credit ledger at the earliest.
The petitioner, Milap Scrap Traders Through Pro. Harshadbhai Manubhai, approached the High Court seeking a direction to the GST department to unblock the Input Tax Credit amounting to Rs.7,68,554/- of CGST and Rs.7,68,549/- of SGST totaling to Rs.15,37,103/-.
The two-judge bench comprising Justice J B Pardiwala and Justice Nisha M Thakore observed that “we need not delve much into the facts of this litigation as the principal issue involved in the present writ application is no longer res integra in view of the recent pronouncement of this Court in the case of Samay Alloys India Pvt. Ltd. vs. State of Gujarat.”
In the above case, the Gujarat High Court had directed the GST Department to refund Rs.20 Lakh to assesseeand held that no power of negative block for credit to be availed in future. When the writ applicants, Samay Alloys attempted to file their return for the month of September, 2021, there was no credit balance in the electronic credit.
Relying on the above order, the bench ruled that “In view of the aforesaid, this writ application succeeds and is hereby allowed. The respondents are directed to withdraw the negative block of the electronic credit ledger at the earliest. The negative block is to the extent of Rs.14,11,678/-. Whatever balance remained in the electronic credit ledger after the removal of the balance to negative figure, the same shall not be utilized by the writ applicant till the show cause notice is issued if any under Section 73 or 74 respectively of the C.G.S.T. Act. Once the negative block is removed, the writ applicant shall proceed to file his returns with appropriate tax, penalty and interest, that may be determined in accordance with law.”
MILAP SCRAP TRADERS THROUGH PRO. HARSHADBHAI MANUBHAI PATEL vs STATE/ COMMERCIAL TAX OFFICER
CITATION: 2022 TAXSCAN (HC) 225
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