Blocking of Electronic Credit Ledger
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Case Title |
Basanta Kumar Shaw Vs Assistant Commissioner of Revenue and Ors. |
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Court |
Calcutta High Court |
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Honorable Judges |
Justice T.S Sivagnanam and Justice Biwas Pattanayak |
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Citation |
2022 (7) GSTPanacea 178 HC Calcutta SCA 976 of 2022 |
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Judgement Date |
28-July-2022 |
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Council for Petitioner |
Ankita Kanodia Himanshu Kumar Ray Megha Aggrawal |
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Council for UOI |
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Council for State |
Anirban Ray D. Ghosh D. Sahu |
The Calcutta High Court bench of Justice T. S Sivagnanam and Biwas Pattanayak has held that If the statute does not use the expression negative balance, such theory cannot be imported to justify the contention that there should be a positive balance to invoke Rule 86 A.
FACTS OF THE CASE
The petitioner is a proprietorship concern and registered under the GST Act,2017. The petitioner was issued three show cause notice dated 20th Jan 2022 and 28th Jan 2022 under Section 42(1) (a) of CGST Act,2017, requiring him to furnish the deatails of inward supply for a particular tax period be matched with the corresponding outward supply of the same period within the time frame by 4th Feb 2022 or pay the amount assessed in the Show cause notice. On 30th Mar 2022 the petitioner paid the amount of Rs. 10 lakhs.
The petitioner did not submit the reply of SCN within specified time frame and so issued order dated 23rd May 2022 under rule 86A , and been debited the IGST credit ledger for disallowing him for any discharge of liability.
The appellant submitted further his reply to the respondent and request to extension of time and unblocking the IGST credit ledger. The appellant submitted that As per rule 86A the credit ledger shall be blocked to the extent amount available in the ledger on the date of blocking, but there was no credit standing in the date of blocking.
The respondent had believe that the credit has been taken fraudulently by petitioner.
The counsel of petitioner by taking reliance on the decision of case Samay Alloys India P Ltd vs State of Gujrat where it is held that commissioner has power under rule 86A of IGST Rule when he has reason to believe that credit has been availed fraudulently or is ineligible.
Blocking of Electronic Credit Ledger
COURT HELD
Considering the facts as recorded, and by taking the reference of case Commissioner of Income Tax Vs Kasturi and Sons Ltd it was held that principal of statutory interpretation is that in a taxing Act, one has to look merely what is clearly said, so there is no room for any intendment, there is no equity about the tax, there is no presumption and nothing is implied.
So by this there is no indication that balance of ledger NIL leads to unblocking of ledger but the said guideline inform the officer that credit available in other tax head availed fraudulently can be blocked subject to law on cross utilization
Hence petitioner used the word negative blocking” and we find no such wordson clear reading of rule 86A and such word may be uses by dealers in common parlance and has no relevance in law and Rule 86A expressed that there is no requirement that ledger should have sufficient balance to block the same.
Hence appeal is dismissed and respondent is directed to consider the reply of petitioner and afford him opportunity of being heard
These cases of the petitioner shall be disposed of by the respondents concerned in accordance with and in the light of observation made above and by passing a reasoned and speaking order after giving effective opportunity of hearing to the petitioners, within eight weeks from the date of communication of this order.
Blocking of Electronic Credit Ledger
ANALYSIS OF THE JUDGEMENT
Clear reading of Rule 86A of IGST Rules, 2017 there is no such expression of negative blocking of credit ledger which is generally used by the dealers in common parlanc
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