M/S Kundlas Loh Udyog vs. State Of Hp And Ors

Held

The High Court, without adverting to the merits of the case, disposed of the writ petition. The Court directed Respondent No. 3, the Joint Commissioner State Taxes and Excise, South Zone, Shimla, to dispose of the representation filed by the petitioner dated 25.04.2022 in accordance with law and expeditiously, preferably within two weeks from the receipt of a copy of the order. The Court did not decide on the vires of Rule 86A or the validity of the blocked ITC. The operative direction was to ensure the timely disposal of the petitioner's pending representation. Any pending miscellaneous applications were also disposed of.

Facts

The petitioner, M/s Kundlas Loh Udyog, filed a writ petition before the Himachal Pradesh High Court challenging Rule 86A of the Himachal Goods and Services Tax Rules, 2017, and a direction dated 23.04.2022 by Respondent No. 3, which blocked Input Tax Credit (ITC) amounting to Rs. 81,13,692/- in their Electronic Credit Ledger. The petitioner argued that Rule 86A constituted excessive delegation and was ultra vires the Himachal Goods and Services Tax Act, 2017. The petitioner had also filed a representation dated 25.04.2022 with Respondent No. 3, but no order had been passed on it. At the hearing, the petitioner's counsel stated that they would be satisfied if Respondent No. 3 was directed to dispose of the representation expeditiously.

Key Issues

1. Whether Rule 86A of the Himachal Goods and Services Tax Rules, 2017, is ultra vires the Himachal Goods and Services Tax Act, 2017, on the grounds of excessive delegation? 2. Whether the direction dated 23.04.2022, blocking the petitioner's Input Tax Credit (ITC) of Rs. 81,13,692/-, is liable to be quashed? Petitioner's arguments: The petitioner contended that Rule 86A of the Himachal Goods and Services Tax Rules, 2017, was an instance of excessive delegation and therefore ultra vires the Himachal Goods and Services Tax Act, 2017. They sought to quash the order blocking their ITC and requested permission to utilize the blocked ITC during the pendency of the writ petition. The petitioner also highlighted that their representation to Respondent No. 3 remained undecided. Revenue's arguments: The judgment does not record any specific arguments from the respondents on the merits of the case. The Senior Additional Advocate General appeared for the respondents.