Ashokkumar Madanlal Bahediya, Prop. Of Maheshwari Traders vs. State Of Gujarat

Held

The Court noted that the petitioner had sought a writ of mandamus to quash the blocking of Input Tax Credit (ITC) of Rs. 1,60,856/- and to allow its utilization. The respondent authorities, through their communication dated 06.10.2021, informed the Court that the said blocked credit had been unblocked with effect from 07.10.2021, in consideration of Rule 86A. The learned advocate for the petitioner confirmed that there was a complete unblocking of his input tax credit. Consequently, the Court found that nothing further survived in the matter. The petition was accordingly permitted to be withdrawn and was disposed of as withdrawn. The notice was discharged. The ratio decidendi is that once the grievance leading to the filing of the writ petition is redressed by the respondent authority, the petition becomes infructuous and can be withdrawn.

Facts

The petitioner, Ashokkumar Madanlal Bahediya, proprietor of Maheshwari Traders, filed a Special Civil Application before the Gujarat High Court seeking to quash and set aside the action of blocking of his Input Tax Credit (ITC) amounting to Rs. 1,60,856/- by the respondent authorities on 28.05.2019. The petitioner also sought directions to allow him to utilize this blocked ITC for paying GST/IGST on goods manufactured and supplied. The Court issued notice on 30.06.2021. Subsequently, on 08.10.2021, the Assistant Government Pleader informed the Court that the blocked credit of Rs. 1,60,856/- was unblocked with effect from 07.10.2021, considering the provisions of Rule 86A. The communication also stated that this unblocking would not preclude the authorities from pursuing other legal remedies for adjudicating ineligible ITC.

Key Issues

1. Whether the action of blocking the Input Tax Credit (ITC) of Rs. 1,60,856/- by the respondent authorities on 28.05.2019 was justified, and whether the petitioner is entitled to utilize the said ITC. (This issue is framed based on the petitioner's primary prayer). Contentions: Petitioner: Argued for the quashing and setting aside of the blocking of ITC and for directions to allow utilization of the credit. The petitioner sought relief in the nature of mandamus. Revenue/State: Submitted through the Assistant Government Pleader that the blocked credit of Rs. 1,60,856/- has been unblocked with effect from 07.10.2021, considering the provisions of Rule 86A. The revenue also stated that this unblocking would not prevent them from pursuing other legal remedies for adjudicating ineligible ITC as per the Central Goods & Services Act, 2017 and Gujarat Goods & Services Act, 2017.