M/S Nimrah Enterprises vs. The Deputy Commissioner Of State Tax
Held
The Court held that the action of the respondents in blocking the Petitioner's Electronic Credit Ledger was set aside. This decision was based on the consensus arrived at between the parties, particularly the Respondent's admission that the Petitioner was not issued notice prior to the blocking of the ledger. The Court found that this action was contrary to the principles of natural justice. The Court relied on its previous common order in W.P.Nos. 70390 of 2024 and batch, dated 26.06.2024, which addressed similar issues. The ratio decidendi is that blocking of a taxpayer's Electronic Credit Ledger without adhering to the principles of natural justice is unsustainable. The respondents were granted liberty to proceed against the petitioner in accordance with law. The Court directed that if the Petitioner was prevented from filing returns due to the unilateral blocking of the ledger, they shall be permitted to submit their returns forthwith, and the impugned blocking shall not be a reason for non-acceptance of these returns. The Writ Petition was disposed of without costs.
Facts
M/s Nimrah Enterprises (Petitioner) filed a writ petition before the High Court of Telangana challenging the order dated 17.05.2024 by the Deputy Commissioner of State Tax (Respondent No. 1) to block the Petitioner's Electronic Credit Ledger (ITC) on the GST portal. The Petitioner contended that this action was taken unilaterally, without issuing any notice or adhering to the principles of natural justice. The Petitioner also sought permission to file GST returns for May 2024 and subsequent periods without late fees, interest, or penalties, as the blocked ledger prevented them from doing so, leading to potential irreparable economic loss. The Respondent, represented by the Special Government Pleader for State Tax, conceded that notice was not issued to the Petitioner before blocking the ledger.
Key Issues
1. Whether the blocking of the Petitioner's Electronic Credit Ledger by the Respondent No. 1, without issuing prior notice and adhering to the principles of natural justice, is a valid action under Rule 86(6) of the Central Goods and Services Tax Rules, 2017? The Petitioner argued that the action of blocking the Electronic Credit Ledger was unilateral and violated the principles of natural justice, as no notice was provided. They relied on a common order of the High Court in W.P.Nos. 70390 of 2024 and batch, dated 26.06.2024, which they stated squarely covered this matter. The Respondent conceded that the Petitioner was not put to notice before the blocking of the Electronic Credit Ledger and admitted that the matter was covered by the aforementioned judgment of the High Court.
Sections Cited
Rule 86(6)
AI-generated summary — verify with the full judgment below
[ 3411 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY ,THE FIFTEENTH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO WRIT PETITION NO: 17397 OF 2024 Between: AND 1 2 M/s Nimrah Enterprises, Represented by the Proprietorsri Syed Akther Hussain, 1O-1-1811'41311 and 18/1 , Flat No.2O3, Grace Elite, Sham Nagar Cotony, MasaU Tank, Khairatabad, Hyderabad Telangana, PlN 500004 ...PETITIONER TheDecutyCommissionerofstateTax,Char,'ninarDrvision,Nanrpally'Near Gandhi Bnav'ian, Hyd:rabad - 500 00i. 6overnrneni o[ Telangana, Represented by the Secr'-"ary to Government of ielangana, Revenud Department, Government Secretariat tsurldlngs'
Saifabad, Hyderabad, PlN. 500 004. ...RES'ONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to call for the records of the Respondent No 1 and issue an appropriate writ, order or direction, more in the nature of writ of certiorari, setting aside the impugned decisron or order dated 171o5t2024 to block the IT
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.