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Without entering into the merits of the order blocking of the electronic credit ledger, in light of Rule 86A(3), restriction in blocking of the electronic credit ledger cannot be extended beyond the period of one year from the date of imposing such restriction and accordingly, in light of blocking having been made on 21.01.2020, its continuance in the present instant is impermissible in law.

Rule 86A of the CGST Rules, 2017— Blocking of Input Tax credit - The Petitioner challenged the act of blocking of credit ledger and its continuance beyond one year. The Petitioner submitted that his electronic credit ledger was blocked on 21.01.2020 and in view of Rule 86-A(3) of the Rules, 2017, blocking of the electronic credit ledger shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. Till date the credit ledger is blocked and accordingly, the same acts to the prejudice of the petitioner. The court observed that in light of Rule 86-A(3), restriction in blocking of the electronic credit ledger cannot be extended beyond the period of one year from the date of imposing such restriction and accordingly, in light of blocking having been made on 21.01.2020, its continuance in the present instant is impermissible in law. Held that:- The Hon’ble High Court set aside the action of the respondents in continuing the blocking of electronic credit ledger. Consequential orders and restoring credit to the electronic credit ledger to be made forthwith.
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