Input tax credit blocking under Rule 86A(3) cannot continue beyond one year; unlawful restraint must be lifted.

Rule 86A(3) of the CGST Rules limits a blocking order on input tax credit to one year from the date of blocking. Where the prescribed period has expired, the restraint cannot continue, because there is no statutory authority to keep the credit ledger blocked beyond that time. On the facts noted, the blocking had already continued past the one-year limit and the expiry was undisputed, so the continued blockage was unlawful and the respondent was required to unblock the input tax credit.

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Issues: Whether the continued blocking of input tax credit beyond the one-year period prescribed under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017 was lawful, and whether the respondent was liable to unblock the credit ledger.

Analysis: Rule 86A(3) limits the operation of a blocking order to one year from the date of blocking. The blocking in the present case had already continued beyond that period, and the expiry of the prescribed time was undisputed. Once the statutory period came to an end, there was no authority to continue the restraint on the petitioner's input tax credit. The continued blockage was therefore contrary to the governing rule and could not be sustained.

Conclusion: The continued blocking of input tax credit beyond the statutory period was unlawful, and the respondent was directed to unblock the petitioner's input tax credit.

Ratio Decidendi: A blocking order under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017 cannot subsist beyond the prescribed one-year period, and any continuation thereafter is without authority of law.

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