Blocking of Input Tax Credit upheld where inspection material and show cause proceedings exist; subordinate action valid with senior authorisation.

Challenge to blocking of input tax credit for the tax period was considered on two issues: validity of blocking under Rule 86A and competence of a subordinate officer. The court accepted that inspection evidence and recorded statements indicating potentially blocked or ineligible invoices, coupled with existence of show cause proceedings, justify blocking of credit; outcome: blocking sustained. On competence, the court treated internal authorisation and issuance of Form GST DRC 01 as satisfying senior approval or delegation requirements; outcome: action by officer below Assistant Commissioner not invalidated when senior authorisation exists. Liberty given to represent within thirty days.

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Issues: (i) Whether the blocking of input tax credit in the electronic credit ledger for the tax period 01.10.2025 to 31.12.2025 under Rule 86A of the GST Rules is maintainable; (ii) Whether an officer below the rank of Assistant Commissioner is competent to block input tax credit under Rule 86A.

Issue (i): Whether the impugned blocking of input tax credit under Rule 86A for the specified tax period is valid.

Analysis: Evidence of an inspection and recorded statements on 04.12.2025 indicated that the credit was claimed on potentially blocked invoices, and the blocking action was taken on 05.12.2025. Prior decisions addressed identical factual and legal circumstances, confirming that blocking under Rule 86A is permissible where the material justifies such action and a show cause notice proceedings are in existence.

Conclusion: The blocking of input tax credit for the specified tax period is valid and the challenge to the blocking is dismissed.

Issue (ii): Whether the action to block credit by an officer below the rank of Assistant Commissioner is beyond jurisdiction under Rule 86A.

Analysis: Prior judicial decisions construed Rule 86A to permit blocking where a subordinate officer acts with the authorisation of a senior officer; issuance of Form GST DRC 01 and internal authorisation satisfy the requirement that the blocking be effected with senior approval. The internal hierarchical permission and the status of the State Tax Officer as proper officer for issuance of show cause notice were treated as validating the impugned action.

Conclusion: The objection based on competence of the officer is rejected; the blocking carried out by the officer below Assistant Commissioner is not invalidated where senior authorisation or proper internal delegation exists.

Final Conclusion: The writ petition challenging the blocking of input tax credit is dismissed; the petitioner is granted liberty to make a representation and, if submitted, the concerned officer shall consider it and pass appropriate orders after hearing within thirty days.

Ratio Decidendi: Where material gathered from inspection and recorded statements indicates ineligibility or potential fraud in claimed input tax credit and a show cause notice is in existence, blocking of credit under Rule 86A is permissible; such blocking by a subordinate officer is valid if effected with senior authorisation or within the internal delegation of powers.

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