M/S. Pure Kopper Manufacturer & Anr vs. Union Of INDIA & Ors
Held
The Court held that the impugned order of blocking the electronic credit ledger of the petitioners has lost its force and cannot be continued. This decision was based on the petitioners' submission, which was not contradicted by the DGGI, that more than a year had expired from the date of passing the blocking order. The Court relied on sub-rule (3) of Rule 86A of the CGST Rules, 2017, which stipulates that the credit in the electronic credit ledger shall not be used where the conditions of sub-rule (1) are not met or where the input tax credit has not been availed. The Court further stated that the legal consequence of this declaration will automatically follow. The respondents were directed to take suitable action. All other grounds raised in the writ petition were not pressed by the petitioners.
Facts
The petitioners, M/s. Pure Kopper Manufacturer & Anr., challenged an order dated January 17, 2020, by which their electronic credit ledger was blocked. The petitioners filed an application (CAN No.2 of 2022) stating that the blocking order had lost its force due to the expiry of more than one year from its passing, as per Rule 86A(3) of the Central Goods & Services Tax Rules, 2017. The Directorate General of Goods Intelligence (DGGI) representative could not contradict this fact. The writ petition and connected applications were heard by the High Court.
Key Issues
1. Whether the impugned order of blocking the electronic credit ledger of the petitioners has lost its force and cannot survive in view of Rule 86A(3) of the Central Goods & Services Tax Rules, 2017, given that more than a year has expired from the date of passing such order? Petitioner's contention: The petitioners argued that the blocking order, passed on January 17, 2020, has become infructuous and unenforceable as more than a year has elapsed since its issuance, citing Rule 86A(3) of the CGST Rules, 2017. Revenue/State's contention: The representative for the DGGI could not contradict the petitioners' submission regarding the expiry of the one-year period and the consequent loss of force of the blocking order.
Sections Cited
Rule 86A(3), Rule 86A(1)
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13-04-2022 Item No.
Subrata IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.4683 of 2020 M/s. Pure Kopper Manufacturer & Anr. -vs- Union of India & Ors. with CAN No.1 of 2020 (Old CAN No.5641 of 2020) and CAN No.2 of 2022 Mr. Arijit Chakrabarti Mr. Nilotpal Chowdhury Mr. Prabir Bera …for the petitioners Mr. Partha Ghoshy Mr. Siddhartha Lahiri …for the Union of India Mr. Somnath Ganguli Ms. Manasi Mukherjee …for DGGI Petitioners in this writ petition have challenged the impugned order of blocking of electronic credit ledger of them as referred to in the writ petition and have filed an application (CAN No.2 of 2022) bringing on record that the impugned order of blocking, which was passed on January 17, 2020, has lost its force and cannot survive in view of rule 86A(3) of the Central Goods & Services Tax Rules, 2017.
Mr Ganguli, learned advocate appearing for DGGI, is not in a position to contradict this fact that more than a year has expired from the date of passing such order of blocking.
Considering the submission of the parties and the facts as appear from record, this writ petition
The judgment continues below.
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