The Single Bench of Calcutta High Court presided by Mr. Justice Md. Nizamuddin has held that no blocking of Input Tax Credit (ITC) in Electronic Ledger without intimating recorded reasons for such action.
The petitioner, Kinaram Vintrade Private Limited filed a writ petition against the action of the West Bengal Goods and Services Tax (WBGST) Authority blocking the Input Tax Credit (ITC) of the petitioner available in the Electronic Ledger without intimating the petitioner the recorded reasons before taking such action.
The Counsel for the petitioner submitted that for any adverse action taken against a person, he must be informed of the reasons for taking such adverse action so that he could know the reasons and basis for taking any coercive and adverse action against him.
The High Court observed that the action of the respondent, WBGST Authority in blocking the Input Tax Credit (ITC) of the petitioner without intimating the recorded reasons for the same to the petitioner is arbitrary, illegal, and in violation of principles of natural justice since it deprives the right of the petitioner to effectively defend or oppose such action of the respondent authority. The counsel for the respondent failed to prove that the recorded reasons based on which the impugned action of blocking of Input Tax Credit (ITC) has been taken, were communicated/intimated to the petitioner.
The High Court while directing the WBGST Authority to cancel or revoke the impugned order has held that “the impugned action of the respondent WBGST Authority taking impugned coercive action of blocking of the petitioner’s Input Tax Credit (ITC) without intimating to the petitioner the recorded reasons for such action are illegal and not sustainable in law and is in violation of the principles of natural justice”.
Mr. Mainak Bose and Mr. A. Ray appeared on behalf of the petitioner and respondent respectively.
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