Sumetco Alloys Private Limited vs. Deputy Commissioner

/11921/2024HC RajasthanGSTCNR RJHC02061206202424 February 2026Bench: INDERJEET SINGH,RAVI CHIRANIA2 pages

AI SummaryRemanded

Facts

The petitioners, Sumetco Alloys Private Limited and Sitevi Infraprojects Private Limited, filed writ petitions before the Rajasthan High Court. The petitions challenged actions taken by the State and Union tax authorities concerning their GST accounts. Specifically, the issue revolved around the blocking of their electronic credit ledger. The respondents, represented by the Deputy Commissioner, State Tax, and other tax authorities, submitted that the blocking of the electronic credit ledger is governed by Sub-Rule 3 of Rule 86A of the CGST Act, 2017, which limits such blocking to a period of one year. The respondents stated that this one-year period had already expired in the present case. The petitioners' counsel did not dispute this legal position.

Held

The Court held that the blocking of the electronic credit ledger is permissible only for a period of one year, as stipulated by Sub-Rule 3 of Rule 86A of the CGST Act, 2017. The respondents confirmed that this one-year period had expired in the case of the petitioner. Since the petitioner's counsel did not dispute this factual and legal position, the Court found that the grievance raised in the writ petition was no longer subsisting. Consequently, the Court disposed of the writ petition as infructuous. The ratio decidendi is that the statutory time limit for blocking an electronic credit ledger under Rule 86A(3) must be adhered to, and once expired, the blocking ceases to have effect. The Court granted liberty to the petitioner to pursue appropriate remedies in the future if the need arises, in accordance with the law.

Key Issues

1. Whether the blocking of the petitioner's electronic credit ledger under Rule 86A of the CGST Act, 2017, is limited to a period of one year, as contended by the respondents? The petitioner's primary contention, as implied by their non-dispute of the respondent's submission, is that the blocking of their electronic credit ledger was subject to the time limitation stipulated in Rule 86A(3) of the CGST Act, 2017. They appear to have argued that once this period expired, the blocking should have ceased. The respondents argued that Sub-Rule 3 of Rule 86A of the CGST Act, 2017, explicitly limits the period for blocking the electronic credit ledger to one year. They contended that since this period had already expired in relation to the petitioner's case, the writ petition had become infructuous due to the changed circumstances.

Sections Cited

Rule 86A(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2026:RJ-JP:8586-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 11921/2024 Sumetco Alloys Private Limited, G-740, Riico Industrial Area, Bhiwadi, Alwar, Rajasthan,301019 Through Its Authorized Signatory Priyanka Bhandari S/o Nirmal Kumar Bhandari, Aged 39 Years, R/o A-1/170, 2Nd Floor, Paschim Vihar, Delhi-110063 Working As Managing Director. ----Petitioner Versus 1. Deputy Commissioner, State Tax, Circle-A, Bhiwadi, Kar Bhawan, Uit Sector-6, Bhiwadi-301019. 2. Joint Commissioner, Circle-C, Enforcement Wing-Iii, Kar Bhawan, Ambedkar Circle,jaipur-302005. 3. State Of Rajasthan, Through Chief Commissioner, State Tax , Rajasthan, State Taxes Department, Kar Bhawan, Ambedkar Circle, Jaipur-302005. 4. Union Of India, Through The Revenue Secretary, Department Of Revenue, Ministry Of Finance, North Block, New Delhi-110001 ----Respondents Connected With D.B. Civil Writ Petition No. 18672/2024 Sitevi Infraprojects Private Limited, Having Its Registered Office At Plot No. 225, Gate No. 5 Rajat Garh Colony, Bundi, Rajasthan - 323001 Through Its Authorised Representative Mr. Kuldeep Singh Sainani ----Petitioner Versus 1. Union Of India, Through The Secretary, Department Of Revenue, Ministry Of Finance, North Block, New Delhi- 110001. 2. Additional Director General, Directorate General Of Gst Intelligence, Gurugram Zonal Unit, Plot No. 44, Sector- 32, Gurugram-122001. 3. Joint Director, Directorate General Of Gst Intelligence, Gurugram Zonal Unit, Plot No. 44, Sector-32, Gurugram- 122001. [2026:RJ-JP:8586-DB] (2 of 2) [CW-11921/2024] 4. State Of Rajasthan, Through The Finance Secretary, Finance Department, 1St Floor, Main Building, Government Secretariat, Janpath, Jaipur-302005. 5. Commissioner, Commercial Taxes Department, Kar Bhawan, Ambdekar Circle, Japiur, Rajasthan-302005. 6. Deputy Commissioner, State Tax, Commercial Tax Department, Ward-Cto/ac, Circle-Bundi (Raj.), Near Bus Stand, Near Ekkhambhekichhatri, Bundi-323001. ----Respondents For Petitioner(s) : Mr. Amit Milani, Advocate. Ms. Priyamvada, Advocate. Mr. Sakshya Jain, Advocate. Ms. Kashni, Advocate. Ms. Priyanka Singal, Advocate. For Respondent(s) : Ms. Mahi Yadav, Additional Advocate General. Mr. Kinshuk Jain, Senior Standing Counsel. HON'BLE MR. JUSTICE INDERJEET SINGH HON'BLE MR. JUSTICE RAVI CHIRANIA

Order 24/02/2026 Counsel for the respondents submits that as per Sub-Rule 3 of Rules 86A of CGST Act, 2017, blocking of Electronic Credit Ledger is only for a period of one year and that period has already expired. Counsel further submits that the present writ petition has become infructuous in view of the changed circumstances.

Counsel for the petitioner has not disputed the position of law.

In that view of the matter, this writ petition is disposed of with liberty to the petitioner to take appropriate remedy if need so arises in future in accordance with law. (RAVI CHIRANIA),J (INDERJEET SINGH),J Tushar/176-177

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