Barmecha Texfab Pvt. Ltd VS Commissioner, Govt. Of Gujarat

The writ-applicant has sought the intervention of the court through the extraordinary writ jurisdiction provided under Article 226 of the Constitution of India. The petitioner’s plea requests a directive to be issued to respondent no. 3, indicating a matter of significant legal concern. This invocation of Article 226 underscores the petitioner’s belief in the court’s ability to address issues that require urgent attention and resolution. By bringing this matter before the court, the petitioner aims to uphold the principles of justice and the rule of law, seeking redressal for what they perceive as a violation of their rights or a breach of legal duty by respondent no. 3. This legal action reflects the petitioner’s confidence in the judiciary’s role as a guardian of constitutional rights and a forum for the resolution of disputes. Through this petition, the petitioner asserts their entitlement to legal remedies and seeks the court’s intervention to ensure that justice is served.

The petitioner has filed a writ petition invoking the extraordinary writ jurisdiction of the Court under Article 226 of the Indian Constitution. They seek a directive to respondent no. 3 to unblock the Electronic Credit Ledger, specifically when the one-year period stipulated under sub-rule 3 of Rule 86A of the Central Goods and Services Tax (CGST) / Goods and Services Tax (GST) Rules has lapsed since the order of blocking.

The Court, in an Oral Order dated December 1, 2021, issued notice for final disposal of the matter. The order acknowledged the petitioner’s plea to unlock the Electronic Credit Ledger, citing the expiration of the one-year period as per sub-rule 3 of Rule 86A of the CGST/GGST Rules. The Court directed respondent No. 3 to unblock the ledger. The matter was scheduled for final disposal with a return date of December 22, 2021. Additionally, the Court permitted service through speed post in addition to regular service methods.

The case at hand concerns an application for the issuance of a writ under Article 226 of the Constitution of India, requesting the unblocking of an Electronic Credit Ledger. Specifically, the petitioner seeks direction for the respondent no. 3 to unblock the ledger, citing the expiry of the one-year period as stipulated under sub-rule 3 of Rule 86A of the Central Goods and Service Tax (CGST)/Goods and Services Tax (GGST) Rules from the date of the blocking order.

On December 1, 2021, the Court issued notice for final disposal, acknowledging the petitioner’s plea and directing the respondent no. 3 to unblock the Electronic Credit Ledger. The order also permitted service through speed post in addition to regular modes. During the recent hearing, the learned Additional Government Pleader (AGP), Mr. Utkarsh Sharma, representing the respondent authorities, conceded that the one-year period specified in sub-rule 3 of Rule 86A of the CGST Rules, 2017, and GGST Rules, 2017, had indeed elapsed.

The petitioner in this case has invoked the extraordinary writ jurisdiction of the court under Article 226 of the Constitution of India, seeking a direction to unblock their Electronic Credit Ledger. This request comes after the expiration of the one-year period specified under sub-rule 3 of Rule 86A of the CGST/GGST Rules from the date of the ledger’s blocking.

The court, through an Oral Order on December 1, 2021, issued notice for final disposal of the matter. The petitioner’s plea was centered around the expiration of the prescribed one-year period and sought a directive for unblocking the ledger. The Assistant Government Pleader (AGP), Mr. Utkarsh Sharma, representing the respondent authorities, acknowledged that the one-year period had indeed lapsed as per sub-rule 3 of Rule 86A of the CGST Rules, 2017, and GGST Rules, 2017. According to the rule, the Electronic Credit Ledger can be blocked for up to one year, after which it should automatically be unblocked. It was emphasized that once this statutory period ends, the authority has no discretion unless a fresh order is issued. Despite the expiry of the one-year period, the authority did not allow the petitioner to utilize the credit available in their ledger, even after representations were made.

The court noted the unfortunate failure of the authority to act in accordance with the law, emphasizing that it was the authority’s duty to allow the petitioner to access their available credit once the prescribed period had elapsed. The disregard for representations made further highlighted the negligence of the authority in this matter. Therefore, it appears that the court is inclined to rule in favor of the petitioner, considering the clear provisions of the law and the lack of justification for the continued blocking of the Electronic Credit Ledger beyond the stipulated period.

The petitioner in this case invoked Article 226 of the Constitution of India, seeking the court’s intervention to direct respondent no.3 to unblock their Electronic Credit Ledger, which had been blocked according to Rule 86A of the CGST/GGST Rules. The court, in response to the petitioner’s plea, issued a notice for final disposal on December 1, 2021. During the hearing, the respondent authorities acknowledged that the period of one year, as stipulated in Rule 86A, had elapsed, necessitating the automatic unblocking of the Electronic Credit Ledger. However, despite this, the authorities failed to unblock the ledger, leading to the petitioner being unable to access their input credit for over two and a half months beyond the statutory period. The court expressed dissatisfaction with the authorities’ handling of the matter, emphasizing that once the statutory period for blocking the ledger expires, the authority is obligated to unblock it and allow the assessee to avail the input credit without further discretion unless a fresh order is passed. The court warned that in similar cases in the future, the concerned authority would be held personally liable for any losses suffered by the assessee during the intervening period. Consequently, the court disposed of the writ-application, affirming the petitioner’s right to access their input credit and signaling the importance of timely compliance with statutory obligations by the authorities.

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