BharatTaxGST

M/S Aryan Tradelink vs. The Union Of INDIA

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WP/8046/2021HC KarnatakaGSTCNR KAHC01015860202121 April 2021Bench: S SUNIL DUTT YADAV5 pages
For Petitioner: Sri Chidananda Urs B.G., AdvocateFor Respondent: Sri Jeevan J. Neeralgi, Advocate for R2 to R6; R1 - Served

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Cause title — parties, addresses and appearances
1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF APRIL, 2021 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.8046/2021 (T-RES) BETWEEN: M/s. Aryan Tradelink, No.569, Shashwath, 14th Main, 23rd Cross, BSK 2nd Stage, Bangalore - 560 070 (Represented by its Partner Shri Samarth Bhutra S/o Mahendra Kumar Bhutra Aged about 25 years). … Petitioner (By Sri Chidananda Urs B.G., Advocate) And: 1. The Union of India, Represented by its Secretary, Ministry of Finance, North Block, New Delhi - 110 001. 2. The Central Board of Indirect Taxes & Customs, North Block, Represented by its Chairman New Delhi - 110 001. 3. The Superintendent of Central Tax, Office of Superintendent of Central Tax, AWD - 5 Range, West Division - 5, Bangalore West Commissionerate, 1st Floor, TTMC Complex, 2 BMTC Bus Stand, Bananshankari, Bengaluru - 560 070. 4. The Commissioner of Central Tax, Bangalore North West Commissionerate, BMTC Building, Shivajinagar, Bangalore - 560 001. 5. The Deputy Commissioner of Central Tax, GST Bengaluru West Commissionerate, West Division - 5, 1st Floor, BMTC Building, Kanakapura Road, Banashankari, Bengaluru - 560 070. 6. The Assistant Commissioner of Central Tax, AWD - 5 Range, West Division - 5, Bangalore West Commissionerate, 1st Floor, TTMC Complex, BMTC Bus Stand, Banashankari, Bangalore - 560 070. ... Respondents (By Sri Jeevan J. Neeralgi, Advocate for R2 to R6; R1 - Served) ***** This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to hold that the act of blocking the credit ledger vide Annexure-C beyond one year as ultra-vires and quash the intimation issued by the R-3 dated 02.02.2012 vide Annexure-K and etc. This Writ Petition coming on for orders this day, the Court, made the following: 3

ORDER Sri. Jeevan J. Neeralgi, learned counsel accepts notice for respondents 2 to 6. 2. Petitioner has filed the present writ petition challenging the act of blocking of credit ledger at Annexure- C and its continuance beyond one year. Petitioner has also sought for setting aside the intimation by respondent No.3 dated 02.02.2012 at Annexure-K and has consequently, sought for necessary direction to respondent No.6 to restore the credit to the electronic credit ledger.

3.

Petitioner submits that the electronic credit ledger of the petitioner was blocked on 21.01.2020 and he draws the attention to Annexure-C and submits that in light of the mandate under Rule 86-A(3) of the CGST Rules, 2017, blocking of the electronic credit ledger shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. It is submitted that till date, the credit ledger is blocked and accordingly, the same acts to the prejudice of the petitioner.

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4.

Learned counsel for the revenue submits that blocking of the electronic credit ledger was confirmed as per the order dated 06.01.2021, but however, he is unable to controvert the legal contention as regards continuance of such blocking the electronic credit ledger beyond the period of one year, which is impermissible in light of Rule 86-A(3).

5.

Without entering into the merits of the order blocking of the electronic credit ledger, in light of Rule 86-A(3), restriction in blocking of the electronic credit ledger cannot be extended beyond the period of one year from the date of imposing such restriction and accordingly, in light of blocking having been made on 21.01.2020, its continuance in the present instant is impermissible in law.

6.

Accordingly, it is declared that the action of the respondents in continuing the blocking of electronic credit ledger is set aside. Consequential orders and restoring credit to the electronic credit ledger to be made forthwith. However, it is clarified that respondents are at liberty to

5 take such action as is permissible in law in connection with the assessment proceedings.

7.

Accordingly, petition is disposed off. JUDGE

VP

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.