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of <h1>GST electronic credit ledger blocked beyond one year u/r 86A-blockage lifted; coercive recovery stayed temporarily.</h1> The dominant issue was whether GST authorities could continue blocking the taxpayer's electronic credit ledger beyond the statutory one-year period after ... Search operation conducted u/s 67 - blocking of electronic credit ledger could not have continued beyond the period of one year from the date of imposition thereof - HELD THAT:- The statutory period of one year has long elapsed, blocking of the petitioner’s electronic credit ledger cannot be permitted to be continued. Accordingly, the respondents are directed to withdraw the blocking of the electronic credit ledger of the petitioner forthwith. Since, it is evident that this Court has entertained writ petitions throwing challenge to the authority of an officer of the Bureau of Investigation even in initiating adjudication proceedings and interim orders have been passed restraining the respondents from taking coercive action against the petitioner, as would be evident from order dated December 6, 2021 passed in M/s. Chatterjee Constructions [2021 (12) TMI 1000 - CALCUTTA HIGH COURT], therefore there is no reason for this Court to take a divergent view. Accordingly, it is directed the respondent GST authorities shall not take any coercive steps on the basis of the adjudication order impugned till the returnable date. Issues: (i) Whether blocking of the petitioner’s electronic credit ledger beyond one year from imposition under Rule 86A of the CGST/SGST Rules, 2017 is permissible; (ii) Whether respondents may take coercive action on the basis of the impugned adjudication order pending further consideration.Issue (i): Whether blocking of the petitioner’s electronic credit ledger beyond one year from imposition under Rule 86A of the CGST/SGST Rules, 2017 is permissible.Analysis: Rule 86A(3) provides that the restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. The Court relied upon the mandatory language of Rule 86A(3) and consistent decisions of other High Courts addressing the temporal limit on continuance of such blocking.Conclusion: The continued blocking beyond one year is not permissible and the conclusion is in favour of the assessee.Issue (ii): Whether respondents may take coercive action on the basis of the impugned adjudication order pending further consideration.Analysis: Having found that the statutory restriction on the electronic credit ledger has expired, and having noted prior orders granting interim protection in analogous matters, the Court considered the balance of convenience and the need to preserve the status quo pending further proceedings; the Court also directed the respondents to file an affidavit addressing jurisdiction and the legality of the search operations for adjudicatory consideration.Conclusion: Respondents are restrained from taking any coercive steps on the basis of the impugned adjudication order until the returnable date; this interim conclusion is in favour of the assessee.Final Conclusion: The decision establishes that administrative blocking of electronic credit ledger under Rule 86A cannot be continued beyond one year and that, pending further judicial consideration and respondent affidavit, coercive enforcement based on the impugned order is stayed.Ratio Decidendi: Rule 86A(3) of the CGST/SGST Rules, 2017 fixes a mandatory one-year temporal limit for restrictions on the electronic credit ledger, and any continuing restriction beyond that period is impermissible.
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