Input tax credit blocking and bank attachment reconsidered on merits, subject to a conditional deposit and timely fresh decision.

Blocking of input tax credit and attachment of a bank account under Rule 86-A(2) of the Tamil Nadu GST Rules were examined for reconsideration on merits, with the court directing the petitioner's reply to the show-cause notice to be treated as the reply to the impugned intimation notices. The authority was required to decide the matter in accordance with law within a fixed time. To balance the interests of both sides, the petitioner was directed to deposit 10% of the disputed tax in cash from the electronic cash ledger, and the bank attachment was made contingent on compliance with that condition, with vacation of the attachment upon such deposit.

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Issues: Whether the blocking of input tax credit and the attachment of the bank account called for interference, and whether the matter should be remitted for consideration on merits with a conditional deposit.

Analysis: The amount involved was substantial, and the authority was required to exercise power under Rule 86-A(2) of the Tamil Nadu Goods and Services Tax Rules, 2017. The petitioner's reply to the show-cause notice was directed to be treated as the reply to the impugned intimation notices, and the authority was asked to pass orders on merits and in accordance with law within a fixed time. To balance the interests of both sides, the petitioner was required to deposit 10% of the disputed tax in cash from the electronic cash register, and the bank attachment was made contingent on compliance with that direction.

Conclusion: The writ petitions were disposed of with directions for reconsideration on merits, subject to the petitioner depositing 10% of the disputed tax, and the bank attachment was ordered to stand vacated on such compliance.

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