K.Vinodhkumar vs. Commissioner Of GST And Central Excise

Held

The Court noted that the Revenue counsel, on instructions, fairly submitted that the electronic credit ledger of the writ petitioner would be unblocked either on the day of the order or by the close of working hours the following day. The petitioner's counsel submitted that this development effectively resolved the grievance raised in the writ petition. Consequently, the Court disposed of the main writ petition and the connected miscellaneous petition, recording the stated position of the Revenue counsel. The Court made no order as to costs. The primary issue regarding the expiry of the restriction under Rule 86-A(3) was rendered moot by the Revenue's undertaking to unblock the ledger.

Facts

The petitioner, K. Vinodhkumar, filed a writ petition seeking a Mandamus to direct the respondents (Commissioner of GST and Central Excise, Tiruchirapalli and Assistant Commissioner, CGST) to allow him to debit Rs. 14,85,336/- from his electronic credit ledger. This amount was available on February 17, 2020, when the ledger was blocked. The petitioner stated he was not put on notice regarding the reason for the blocking, which he believed was under Rule 86-A of the CGST Rules, 2017. He also submitted a representation on November 29, 2021, which remained unanswered. The respondents confirmed the blocking was under Rule 86-A due to alleged wrong availment of Input Tax Credit (ITC), but no formal proceedings had been initiated.

Key Issues

1. Whether the restriction imposed on the petitioner's electronic credit ledger under Rule 86-A of the CGST Rules, 2017, has ceased to have effect after the expiry of one year from the date of its imposition, as stipulated in Sub-Rule (3) of Rule 86-A? Petitioner's arguments: The petitioner contended that even if the blocking was for a valid reason under Rule 86-A, the restriction expired on February 17, 2021, after one year from the date of imposition. He argued that Rule 86-A is akin to a provisional attachment, and therefore, the timeline in Sub-Rule (3) is operative. He also pointed out the lack of response to his representation. Revenue's arguments: The Revenue confirmed that the blocking was under Rule 86-A due to alleged wrong availment of Input Tax Credit (ITC). They acknowledged that no proceedings had been initiated and that the blocking prima facie appeared to have elapsed on February 17, 2021.