If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing.
Input tax credit— Section 16 of CGST Act— In the instant case, the petitioner pointed out that, the Commissioner of GST has invoked the powers under Rule 86A of CGST Rules by disallowing the debit of an amount equivalent to Rs. 1,11,60,830/- from the electronic credit ledger of the petitioner.
In the present case, the attachment of the petitioner’s ledger account was ordered on 21st May 2020. More than a year has passed since then. Such attachment, therefore, must be lifted.
The petitioner cannot be saddled with the liability of paying this tax on account of lapses on part of the purchaser. It is in this context, the petitioner has challenged the vires of Section 16(2)(c) of the Central Goods and Service Tax Act, 2017.
If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing. Sub-rule (3) of Rule 86A clearly brings about this legislative intent while it provides that such restrictions shall cease to have effect after the expiry of a period of one year.
Held that— Under the circumstances, department cannot continue to subject the petitioner’s electronic credit ledger to the restrictions imposed by the Commissioner, on 21st May 2020.
If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing.
Input tax credit— Section 16 of CGST Act— In the instant case, the petitioner pointed out that, the Commissioner of GST has invoked the powers under Rule 86A of CGST Rules by disallowing the debit of an amount equivalent to Rs. 1,11,60,830/- from the electronic credit ledger of the petitioner.
In the present case, the attachment of the petitioner’s ledger account was ordered on 21st May 2020. More than a year has passed since then. Such attachment, therefore, must be lifted.
The petitioner cannot be saddled with the liability of paying this tax on account of lapses on part of the purchaser. It is in this context, the petitioner has challenged the vires of Section 16(2)(c) of the Central Goods and Service Tax Act, 2017.
If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass an order after bi-parte hearing. Sub-rule (3) of Rule 86A clearly brings about this legislative intent while it provides that such restrictions shall cease to have effect after the expiry of a period of one year.
Held that— Under the circumstances, department cannot continue to subject the petitioner’s electronic credit ledger to the restrictions imposed by the Commissioner, on 21st May 2020.