Barmecha Texfab PVT. LTD. vs. Commissioner, Govt. Of Gujarat
Facts
The petitioner, Barmecha Texfab Pvt. Ltd., invoked the writ jurisdiction of the Gujarat High Court seeking a direction to unblock its Electronic Credit Ledger. The ledger had been blocked by Respondent No. 3. The petitioner contended that the period of one year, as prescribed under sub-rule 3 of Rule 86A of the CGST/GGST Rules, had elapsed since the order of blocking. The petitioner had also made representations to the authority regarding the unblocking of the ledger, which were not heeded. The revenue authorities were represented by the learned AGP.
Held
The Court held that the Electronic Credit Ledger, once blocked for a period of one year under sub-rule 3 of Rule 86A of the CGST/GGST Rules, would automatically get unblocked upon the expiry of that period. The Court noted that it was the duty of the concerned authority to permit the assessee to avail the input credit available in the ledger once the statutory period ended. The Court found it unfortunate that despite the expiry of the one-year period, the authority had not permitted the petitioner to avail the credit, even after representations were made. The Court observed that the authority had failed to unblock the ledger for approximately two and a half months after the statutory life of the blocking order ended. The Court warned that in future, concerned authorities would be held personally liable for any loss suffered by the assessee during such interregnum periods.
Key Issues
1. Whether the Electronic Credit Ledger, blocked under sub-rule 3 of Rule 86A of the CGST/GGST Rules, should be automatically unblocked upon the expiry of the one-year period prescribed therein? (Question of law turning on Rule 86A(3) of CGST/GGST Rules). Petitioner's Argument: The petitioner argued that the period of one year prescribed under sub-rule 3 of Rule 86A of the CGST/GGST Rules had elapsed, and therefore, the Electronic Credit Ledger should be unblocked. They relied on the statutory provision itself, emphasizing that the rule provides for a specific duration for blocking. Revenue's Argument: The learned AGP for the respondent authorities fairly conceded that the period of one year had elapsed in terms of sub-rule 3 of Rule 86A of the CGST Rules, 2017 and GGST Rules, 2017.
Sections Cited
Rule 86A(3)
AI-generated summary — verify with the full judgment below
C/SCA/17567/2021 JUDGMENT DATED: 12/01/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 17567 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? NO ================================================================ BARMECHA TEXFAB PVT. LTD. Versus COMMISSIONER, GOVT. OF GUJARAT ================================================================ Appearance: MR AVINASH PODDAR, ADVOCATE for the Petitioner(s) No. 1 MR UTKARSH SHARMA, AGP for the State – Respondent(s). ================================================================ CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTIC
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