Ms Rajuri Steels And Tmt Bars PVT LTD Through Its Director vs. Union Of INDIA Through The Revenue Secretary And Others

Held

The Court held that clause 13 of Circular No. 04/2021 dated 24.05.2021 indicates that applications for hearing, made after the blocking of Input Tax Credit (ITC), can be treated as representations from the taxpayers against such blocking. The authorized officer is expected to dispose of these representations within a reasonable time, around 15 days. If the officer is satisfied that the conditions under Rule 86A no longer exist or were contrary to the belief leading to the blocking, they may unblock the credits as per Rule 86A(2). The Court noted that an online hearing was scheduled for September 4, 2024, and kept all contentions of the parties open for consideration by the authority. The Court directed the authority to pass an order by 1:00 p.m. on September 9, 2024, and upload it or serve it on the petitioners. The Court emphasized the urgency, considering the potential business standstill if monthly returns were not filed by September 10, 2024. The petitions were disposed of with liberty to the petitioners to challenge the composite order if their grievance was not redressed.

Facts

The petitioners, MS Omsairam Steels and Alloys Pvt Ltd, MS Matsyodari Steel and Alloy Private Limited, MS Rajuri Steels and TMT Bars Pvt Ltd, and M/s Geetai Steels Pvt Ltd, filed writ petitions before the Bombay High Court. The petitions concerned the blocking of their Input Tax Credit (ITC). The petitioners had preferred applications for hearing after their ITC was blocked. The court noted that clause 13 of Circular No. 04/2021 dated 24.05.2021 allows such applications to be treated as representations against the blocking of ITC, to be disposed of by the authorized officer within approximately 15 days. An online hearing was scheduled for September 4, 2024. The court expected the authority to pass an order by September 9, 2024, considering the potential standstill of the petitioners' businesses if monthly returns were not filed by September 10, 2024.

Key Issues

1. Whether the applications preferred by the petitioners for hearing, after the blocking of their Input Tax Credit (ITC), are to be treated as representations against the blocking of ITC as per clause 13 of Circular No. 04/2021 dated 24.05.2021? Petitioner's Contention: The petitioners argued that their applications for hearing should be considered as representations against the blocking of ITC, as contemplated by the relevant circular. They relied on clause 13 of Circular No. 04/2021. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or the Union of India regarding the interpretation of the circular or the nature of the petitioners' applications. The court's observations suggest a procedural path forward rather than a contest on the interpretation of the law at this stage.