Input tax credit blocking under Rule 86A: Court declines further scrutiny where recovery remedies remain available.

Rule 86A of the Orissa GST Rules, 2017 governs blocking of electronic credit ledger input tax credit, and the restriction is noted as operating for a maximum period of one year, subject to lifting if the disallowing conditions cease to exist. The Court recorded that the investigation report had been filed and that the revenue could pursue recovery under sections 73 or 74 instead of continuing under Rule 86A. In that setting, it declined to examine the legality of the alleged negative blocking or appropriation further, leaving the matter to proceed in accordance with law without a merits determination.

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Issues: Whether the challenge to the blocking of input tax credit and the allegation of negative blocking required further adjudication in the present proceeding.

Analysis: The dispute concerned the operation of Rule 86A of the Orissa Goods and Services Tax Rules, 2017 and the scope of continued blockage of the electronic credit ledger. The Court noted the earlier view that the restriction operates for a maximum period of one year and that the authority may lift the restriction if the disallowing conditions no longer exist. It also noted the submission that the investigation report had already been filed and that the revenue could pursue appropriate recovery proceedings under sections 73 or 74 rather than proceed under Rule 86A. In that background, the Court found no necessity to enter upon any further view on the question of appropriation or negative blocking.

Conclusion: No further adjudication was made on the challenge to the impugned blocking order, and the matter was left to proceed in accordance with law.

Final Conclusion: The proceeding ended without a merits determination on the legality of the alleged negative blocking, leaving the revenue remedy and the statutory mechanism under Rule 86A unaffected.

Ratio Decidendi: Where the statutory mechanism itself provides for redress during the blocking period and the revenue indicates resort to regular recovery proceedings, the Court may decline to pronounce further on the impugned blocking action and dispose of the matter.

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