Rule 86A input tax credit blocking does not require prior Section 74 notice; limited filing relief was granted.

Blocking of available input tax credit under Rule 86A is distinct from determination proceedings for wrongly availed credit, so a prior show-cause notice under Section 74 is not a mandatory pre-condition for such action. The challenge to the prescribed-form intimation and the consequential assessment for non-filing of return was rejected, as the pre-notice intimation was treated as a permissible discretionary step and no substantive interference was warranted. However, fairness required limited relief: the authority was directed to decide the unblocking representation expeditiously, and the taxpayer was allowed 30 days to file the return after communication of that decision.

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Issues: (i) Whether blocking of available input tax credit under Rule 86A of the Odisha Goods and Services Tax Rules, 2017 required prior show-cause notice under Section 74 of the Odisha Goods and Services Tax Act, 2017. (ii) Whether the intimation issued in the prescribed form and the assessment made for non-filing of return called for interference. (iii) Whether the petitioner was entitled to time to file return after decision on the representation for unblocking of input tax credit.

Issue (i): Whether blocking of available input tax credit under Rule 86A of the Odisha Goods and Services Tax Rules, 2017 required prior show-cause notice under Section 74 of the Odisha Goods and Services Tax Act, 2017.

Analysis: Rule 86A operates in the field of blocking available credit, whereas Section 74 governs determination of tax on credit already availed wrongly by reason of fraud, wilful misstatement, or suppression of facts. The two provisions serve different purposes and operate at different stages. A prior show-cause notice under Section 74 cannot be read as a mandatory pre-condition for action under Rule 86A.

Conclusion: The objection to blocking of input tax credit on the ground of absence of a prior Section 74 notice failed.

Issue (ii): Whether the intimation issued in the prescribed form and the assessment made for non-filing of return called for interference.

Analysis: The intimation under Rule 142(1A) is a discretionary step preceding notice and determination. The Court accepted the revenue's contention that such intimation could be issued. On the assessment aspect, the Court noted the petitioner's grievance that blocking of available credit may have prevented filing of return, but interference with the assessment itself was not granted.

Conclusion: The challenge to the intimation was rejected and no substantive interference was made with the assessment order.

Issue (iii): Whether the petitioner was entitled to time to file return after decision on the representation for unblocking of input tax credit.

Analysis: Since the petitioner had sought unblocking by representation, and the dispute over blocking affected filing of return, fairness required that the petitioner be given a fresh period to comply after the representation was decided. The authority was therefore directed to decide the representation expeditiously.

Conclusion: The petitioner was granted 30 days to file the return from the date of communication of the decision on the unblocking representation.

Final Conclusion: The writ petition was substantially rejected on the legality of blocking and the prior intimation, but limited relief was granted by directing expeditious disposal of the unblocking representation and allowing time to file the return thereafter.

Ratio Decidendi: Blocking of available input tax credit under Rule 86A is distinct from determination proceedings under Section 74 and does not require a prior show-cause notice under that provision; a discretionary pre-notice intimation and consequential limited procedural relief may be granted without invalidating the blocking action.

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