Input Tax Credit Blockage Lifted Under CGST Rule 86(3)A: Court Directs Authority Action

The court held that the blocking of Input Tax Credit dated 16th January, 2020 was no longer valid under Rule 86(3)A of the CGST Rules. It directed the concerned authority to lift the blockage if not already done so. The court ordered the impleadment of DGGI-East, Kolkata as respondent no.6 and instructed the department to proceed accordingly. The remaining challenges in the writ petition were to be addressed through affidavits, with a timeline set for filing and reply. The judgment clarified legal issues and outlined procedural steps for the parties.

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Issues Involved:
Challenge to the blocking of Input Tax Credit by the respondent authority on the grounds of expiry of time limit and alleged insistence on payment during investigation proceedings.

Analysis:

1. Blocking of Input Tax Credit:
The petitioner challenged the blocking of Input Tax Credit by the respondent authority, contending that it had lost its force after one year from the date of the order imposing the restriction. The respondent's advocate acknowledged that the Input Tax Credit had been blocked by DGGI-East, Kolkata, but could not dispute the legal position under Rule 86(3)A of the CGST Rules. The court, based on the admitted legal position, held that the blocking of Input Tax Credit dated 16th January, 2020 was no longer valid and directed the concerned authority to immediately lift the blockage if not already done so.

2. Impleadment of Relevant Party:
The advocate representing DGGI-East, Kolkata pointed out that they were the relevant party in the writ petition but had not been impleaded by the petitioner. The court directed the impleadment of DGGI-East, Kolkata as respondent no.6 and instructed the department to proceed accordingly.

3. Adjudication of Other Challenges:
Regarding the remaining challenges raised in the writ petition, the court opined that these issues could only be resolved through affidavits by the respondents. It directed the respondents to file an affidavit in opposition within three weeks, with the petitioners given one week to file a reply. The matter was scheduled for final hearing after five weeks, with a requirement for parties to have concise written argument notes ready for the hearing.

In conclusion, the judgment primarily focused on the validity of blocking Input Tax Credit under the CGST Rules, the impleadment of the relevant party, and the procedural steps for addressing the remaining challenges raised in the writ petition. The court's decision provided clarity on the legal aspects of the case and outlined the next steps to be taken by the parties involved.

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