Wipro LTD vs. Assistant Commissioner Of GST Mcie Division CGST

Held

The Court did not decide the legality of Rule 86A or the merits of the petitioner's claim regarding the unblocking of ITC. Instead, noting that the petitioner's representations dated June 15, 2021, and September 17, 2021, had not been decided by the respondent, the Court disposed of the writ petition with a specific direction. The respondent was ordered to decide these representations by way of a reasoned order in accordance with the law within four weeks from the date of the order. The Court explicitly stated that the rights and contentions of all parties were left open, meaning the underlying dispute regarding the ITC blocking and the validity of Rule 86A were not adjudicated upon. The operative direction was to ensure the respondent addresses the pending representations.

Facts

The petitioner, Wipro Ltd., filed a writ petition challenging Rule 86A of the CGST Rules, 2017, and seeking the unblocking of its Input Tax Credit (ITC) amounting to INR 8,72,22,741/-. The petitioner contended that the blocking of its ITC for over a year violated Rule 86A(3) of the CGST Rules, which mandates that any restriction on ITC usage must cease after one year from its imposition. The petitioner also argued that the blocking of credit was done without providing any reasons, violating principles of natural justice. Despite representations made on June 15, 2021, and September 17, 2021, the respondent, Assistant Commissioner of GST MCIE Division CGST, had neither responded nor unblocked the ITC. The respondent's counsel stated they had no instructions.

Key Issues

1. Whether Rule 86A of the CGST Rules, 2017, is illegal, arbitrary, and bad in law. 2. Whether the continued blocking of the petitioner's ITC of INR 8,72,22,741/- beyond one year, from January 25, 2021, is illegal due to the violation of the express mandate of Rule 86A(3) of the CGST Rules, 2017. 3. Whether the action of blocking the petitioner's ITC without providing any reasons violates the principles of natural justice. Petitioner's Arguments: The petitioner argued that Rule 86A(3) mandates the unblocking of ITC after one year, which had lapsed in this case. They also contended that the blocking of credit without assigning reasons violated natural justice. The petitioner relied on their representations dated June 15, 2021, and September 17, 2021, which remained unanswered. Respondent's Arguments: The respondent's counsel stated they had no instructions in the present case.