V K Enterprises Through Its Proprietor Sri Vicky Kumar vs. The State Of Jharkhand Through The Commissioner State Goods And Service Tax

Facts

The petitioner, V K Enterprises, filed a writ petition before the Jharkhand High Court challenging the blocking of its Input Tax Credit (ITC) in the Electronic Credit Ledger and the suspension of its GST registration. The petitioner argued that the ITC was blocked and registration suspended without any determination of tax due or finalization of proceedings. The petitioner had responded to a notice in Form GST ASMT 10 issued under Section 61 of the JGST Act, 2017, read with Rule 99(1) of the JGST Rules, and had also made a representation for the revocation of the blocked ITC. During the pendency of the writ petition, the suspension of the petitioner's registration was revoked.

Held

The Court noted that the suspension of the petitioner's registration had been revoked during the pendency of the writ petition. The sole remaining grievance of the petitioner was the blocking of Input Tax Credit in their Electronic Credit Ledger. The petitioner had responded to the notice in Form GST ASMT 10 and had made a representation to the respondent authority for the revocation of the blocked ITC. The petitioner sought permission to withdraw the writ petition to pursue this representation. The Court granted this permission, dismissing the writ petition as withdrawn. The Court clarified that the withdrawal would not prejudice the petitioner's grounds available in law and fact before the respondent-authorities. The respondents indicated that the petitioner's representation would be considered in accordance with law.

Key Issues

1. Whether the blocking of Input Tax Credit lying in the Electronic Credit Ledger of the petitioner, without any determination of tax due or finalization of any proceeding, is bad in law, particularly when the claim for ITC is based on valid invoices, transport documents, and payments made via banking channels (Section 61 of the JGST Act, 2017, read with Rule 99(1) of the JGST Rules)? 2. Whether the suspension of the assessee's registration, without any valid reason and without providing an opportunity of hearing, is in violation of Rule 21A of the Rules 2017? Petitioner's arguments: The petitioner contended that blocking ITC and suspending registration without proper determination of dues or finalization of proceedings is illegal. They argued that their ITC claims were based on valid documentation and payments. They also highlighted that the suspension of registration was done without due process and opportunity of hearing. Respondents' arguments: The respondents, represented by the State of Jharkhand and its GST authorities, stated that the petitioner should pursue their representation before the concerned authority, which would be considered in accordance with law.