M/S Purvi Iron Limited Through Its Authorized Signatory And Senior Executive Sanjay Kumar Bhotika vs. The State Of Jharkhand Through Its Commissioner Of State Tax

Facts

The petitioner, M/s Purvi Iron Limited, filed a writ petition before the Jharkhand High Court challenging an order dated August 21, 2023. This order, passed by the revenue authorities, resulted in the blocking of the petitioner's Input Tax Credit (ITC) in its Electronic Credit Ledger. The blocking was done under Rule 86A of the Jharkhand Goods and Services Tax Rules, 2017. The petitioner's registered office is in Kolkata, West Bengal, and its works are located in Jamshedpur, Jharkhand. The respondents include the State of Jharkhand and its tax authorities, as well as the State of Bihar and its tax authorities, and a private company, Paramshanti Steels Private Limited.

Held

The Court noted that the petitioner's counsel, on instructions from the authorized agent of M/s Purvi Iron Limited, stated that the Electronic Credit Ledger pertaining to the petitioner industry has since been unlocked. Consequently, the writ petition has been rendered infructuous. The Court did not delve into the merits of the original challenge to the blocking order under Rule 86A. The reasoning for the decision is solely based on the subsequent event of the ledger being unlocked, making the challenge moot. No specific finding was made on the legality of the initial order. The operative direction was to dispose of the petition as infructuous.

Key Issues

1. Whether the blocking of the petitioner's Input Tax Credit in the Electronic Credit Ledger under Rule 86A of the Jharkhand Goods and Services Tax Rules, 2017, was justified. The petitioner argued that the blocking of its ITC was arbitrary and without proper justification. The revenue authorities, represented by the State of Jharkhand, contended that the blocking was done in accordance with the provisions of Rule 86A, which allows for such action if there is a reasonable belief that Input Tax Credit has been wrongly availed or is ineligible. The judgment does not explicitly detail the specific grounds for the initial blocking of the ITC or the detailed arguments presented by the revenue, other than referencing the invocation of Rule 86A. The petitioner's primary contention, as indicated by the subsequent development, was the illegality or impropriety of the blocking itself.