2024 (11) TMI 1463

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....), as well as the blocking of its Electronic Credit Ledger (ECL) in purported exercise of powers conferred by Rule 86A of the Central Goods and Services Tax Rules, 2017 (Rules). 2. Before us, submissions were confined to the negative blocking of the ECL with it being submitted that the petitioner chooses not to pursue a challenge to the provisional attachment of bank accounts at this stage. We in consequence proceed to consider the writ petition bearing in mind the statement made and noticed above. 3. Learned counsel for the writ petitioner drew our attention to the order dated 08 October 2024 passed by the respondents imposing a block on its ECL along with a screenshot of the ledger and which ex facie indicates the balance in the ECL....

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....lently availed or is ineligible. The concerned authorities are required to proceed to determine whether a taxpayer has wrongly availed or utilized the ITC, under Sections 73 or 74 of the CGST Act and if it is found that the taxpayer has wrongly availed of the ITC the proper officer is required to pass an order to determine the amount of tax, interest or penalty payable. The demand as raised are required to be determined under Sections 73 and 74 of the CGST Act. 79. If at any stage the Commissioner or an officer authorized by him is satisfied that the conditions for disallowing debit no longer exists, Sub-rule (2) of Rule 86A of the Rules requires such officer to permit debit from the taxpayer's ECL. In any event, by virtue of S....

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....d by him has reasons to believe, was fraudulently availed or was ineligible. Such an interpretation would in effect amount to construe an Order under Rule 86A(1) of the Rules as an order for recovery of tax. This is obvious because the taxpayer would now have to incur a larger cash outflow for payment of taxes as he would be denied utilization of validly availed ITC, which he would require to accumulate to compensate for the ITC availed and utilized which the Commissioner or an officer authorized by him, has reasons to believe was fraudulently availed or was ineligible. 83. In view of the above, the petitions are allowed and the orders impugned in the present petitions, as tabulated below, are set aside to the extent the impugned o....