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Since the proceedings have already been initiated under Section 73 of the Act of 2017 by the respondent no.3, the issue at hand should not be agitated on merits in the writ proceedings. It would not be proper for the Writ Court to enter into the merits of the controversy at this stage in such circumstances.

Rule 86A of the CGST Rules, 2017 — Blocking of ITC – The petitioner challenged action on blocking of its electronic credit ledger due to non-filing of GSTR-3B by its vendor though GSTR-I was filed by him. Two demand notices dated 5thAugust 2020 were issued by the respondent no.3 under Rule 86A(1)(a)(i) on the ground that ITC availed by the petitioner was ineligible. The petitioner submitted that these notices have been issued without proper application of mind. The first notice was issued under Rule 86A(1)(a)(i) on the foundational basis that respondent no.4 was shown as ‘non-existent dealer’. The revised notice has been issued under Rule 86A(1)(b) on the basis that the respondent no.4 is a GSTR-3B return defaulter. The transaction between the petitioner and the respondent no.4 were over by 2ndMay 2019 whereas Rule 86A has been brought by way of an amendment w.e.f. 1stJanuary 2020 vide notification dated 26thDecember 2019. The counsel for respondent submits that since a proceeding under Section 73 has been initiated, the petitioner should appear and place all the relevant documents before the authority. Held that:- The Hon’ble High Court directed the petitioner to produce all relevant documents for proper adjudication thereupon. Petitioner should appear before the respondent no.3 on 8th February 2021. Respondent no.3 would endeavour to conclude the proceedings preferably within a period of 12 weeks thereof.
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