The Karnataka High Court, noting that a period of one year had lapsed, has set aside the blocking of GST ITC as detailed in Annexure-‘K’ dated 19.05.2023.
The assessee has requested the setting aside of the notice at Annexure-‘G’ dated 21.04.2023, as well as the notices at Annexures-‘H’ and ‘H1’, both issued in Form GST ASMT-10 under reference No. LGSTO-010/ASMT 10/BOGUS/23-24 dated 06.05.2023, and has also sought the setting aside of the order at Annexure-‘K’ dated 19.05.2023.
The case of the assessee is that the respondent has resorted to blocking of Input Tax Credit (ITC) in exercise of power under Rule 86A of CGST/IGST Rules, 2017
The said order has come into effect from 19.05.2023. Pursuant to such proceedings, the Credit Ledger has been blocked in terms of Annexures-‘L’, ‘L1’ and ‘L2’ dated 20.05.2023, 03.06.2023 and 05.06.2023 respectively.
It was to be noticed that under Rule 86A (3) of the said Rules, the blocking of ITC is only for a period of one year.
Smt. Veena J. Kamath, representing the assessee submitted that due to medical reasons, the assessee is not in a position to file an Affidavit in writing to that effect and however on instructions, further submitted that the assessee intends to file the returns.
Mrs. Hema Kumar, Additional Government Advocate appearing for the respondents submitted that the proceedings have been initiated for cancellation of registration, which however has been deferred in light of the petitioner making reference to the present proceedings
The Single bench of Justice Sunil Dutt Yadav held that the period of one year having lapsed, the blocking of ITC at Annexure-‘K’ dated 19.05.2023 has been set aside and consequently, the blocking of Credit Ledgers at Annexures-‘L’, ‘L1’ and ‘L2’ dated 20.05.2023, 03.06.2023 and 05.06.2023 are set aside.
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