M/S Royal Brothers Indane Services And Ors vs. The Union Of INDIA And Ors

Held

The Court noted that the grievance of the petitioner regarding the blocking of its electronic credit ledger appeared to have been redressed, as steps for unblocking had been initiated and were in progress. The Revenue also informed the Court that the petitioner had outstanding dues, including tax, interest, and penalty, as per an order-in-original dated 30.12.2022. The petitioner's counsel indicated that the petitioner would be advised to make payment of any outstanding dues resulting from the adjudication proceeding. Given these developments, the Court found that the primary grievance of the petitioner had been addressed. Therefore, the writ petition was disposed of as infructuous. The Court did not make any specific findings on the validity of the original blocking order or the quantum of dues, but acknowledged the progress in unblocking and the petitioner's intention to address outstanding liabilities.

Facts

The petitioner, M/s Royal Brothers Indane Services, filed a writ petition challenging the blocking of its electronic credit ledger. The blocking was apparently due to non-filing of GST returns for a period from January 2023 to 2024, as indicated by a notice under Section 46 for non-filing of GSTR-3B. The petitioner initially sought time to file a categorical statement regarding return filings. Subsequently, the petitioner filed a supplementary affidavit enclosing GST returns from 2020-21 to 2023-24 and proof of payments. The Revenue informed the court that unblocking of the credit ledger had been initiated and was in progress. The Revenue also noted that GSTR-3A notices for Jan-24 and Feb-24 were system-generated and that the petitioner had outstanding dues of Rs. 57,74,533/- along with interest and penalty, confirmed by an adjudication order dated 30.12.2022.

Key Issues

1. Whether the electronic credit ledger of the petitioner was wrongly blocked, and if so, what is the recourse available to the petitioner? (Mixed question of law and fact, concerning the blocking of credit ledger and the provisions of the GST Act related to return filing and credit utilization). Petitioner's contention: The petitioner argued that it had been filing regular returns throughout the period in question, implying that the blocking of the credit ledger was erroneous. They sought time to provide categorical statements and later submitted proof of filings and payments. Revenue's contention: The Revenue stated that the unblocking of the credit ledger was initiated and in progress. They highlighted that GSTR-3A notices were system-generated and pointed to an adjudication order confirming outstanding dues of Rs. 57,74,533/- with interest and penalty, suggesting that the petitioner had a liability to pay these amounts. They sought to inform the court about the unblocking and requested a direction for the petitioner to pay the outstanding dues.