Reliable Traders vs. Pr. Commissioner Of Central Goods And Services Tax Delhi North
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The petitioner challenged Rule 86A of the CGST Rules, 2017, and the blocking of their input tax credit (ITC) without notice. The revenue stated the petitioner was not cooperating with an investigation and had availed fraudulent ITC.
Held
The Court accepted the respondent's statement that the ITC ledger had been unblocked after a year and the petitioner had resumed utilizing ITC. Consequently, the writ petition was disposed of as infructuous.
Key Issues
The primary issues were the validity of Rule 86A and the legality of blocking ITC without due process. The court also considered the petitioner's alleged non-cooperation with investigations.
Sections Cited
Rule 86A, Section 16, Section 164
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Cause title — parties, addresses and appearances
O R D E R
Present writ petition has been filed seeking a declaration that Rule 86A of the Central Goods and Services Rules, 2017 is ultra vires Sections 16 and 164 of the Central Goods and Services Tax Act, 2017 as well as Articles 14, 19(1)(g) and 300A of the Constitution of India. The petitioner also prays for quashing of the respondent’s action of blocking the input tax credit of the petitioner.
Learned counsel for the petitioner states that the respondent/revenue has blocked the input tax credit of the petitioner in the electronic credit ledger. He states that the petitioner is involved in both import of goods and sourcing them from domestic suppliers. He submits that the impugned action of blocking the input tax credit has been carried out behind the petitioner’s back without giving any notice and/or opportunity of hearing. He contends that the petitioner qua the imported goods has paid Integrated Goods and Service Tax (IGST) on reverse charge basis. In support of his This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 17:46:02 Ors., R/Special Civil Application No.17202 of 2021 dated 23rd
Per contra, learned counsel for the CGST states that the petitioner and his authorized representatives are not cooperating in the investigation. He states that they are neither appearing nor producing the relevant information and that the ITC was blocked due to the fact that the petitioner had availed fraudulent ITC from domestic suppliers. It is further stated that however, since one year had passed, the ITC ledger has already been unblocked and the petitioner has also started utilizing his ITC. February, 2022. 4. The statement made by learned counsel for the respondent is accepted by this Court and the respondent is held bound by the same.
In view of the aforesaid, the present writ petition along with pending application stands disposed of as infructuous. However, the petitioner and his authorized representatives are directed to cooperate in the investigation. They are further directed to appear on each and every date when they are summoned by the respondent. The authorized representatives of the petitioner shall hand over whatever documents/information is asked for by the respondent. The rights and contentions of all the parties are left open.
MANMOHAN, J
DINESH KUMAR SHARMA, J MAY 4, 2022/rb This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 17/06/2026 at 17:46:02
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.