Ms Matsyodari Steel And Alloy Private Limited Through Its Head Accountant 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 after the blocking of Input Tax Credit (ITC) could be treated as representations from taxpayers. 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 are contrary to the belief that led 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 open for consideration by the authority. The Court expected 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, stating that the business of the petitioners is likely to come to a standstill if monthly returns are not filed by September 10, 2024. The petitions were disposed of with liberty to challenge the composite order if grievances were 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. These petitions were filed after their Input Tax Credit (ITC) was blocked. The petitioners had preferred applications for hearing following the blocking of their ITC. The High Court noted that clause 13 of Circular No. 04/2021 dated 24.05.2021 provides for such applications to be treated as representations against the blocking of ITC, to be disposed of by the authorized officer within approximately 15 days.

Key Issues

1. Whether the applications preferred by the petitioners for hearing after the blocking of their Input Tax Credit (ITC) should be treated as representations against the blocking of ITC, as contemplated by clause 13 of Circular No. 04/2021 dated 24.05.2021? Petitioner's contention: The petitioners argued that their applications for hearing should be processed in terms of clause 13 of Circular No. 04/2021, which envisages disposal of such representations within a reasonable time. They relied on the circular to support their claim for timely redressal. Revenue's contention: The judgment does not record any specific argument from the revenue or state regarding the interpretation of clause 13 of the circular or the procedure for dealing with the petitioners' applications. However, the court's direction implies an expectation for the revenue authorities to act upon the applications.