GST Update

???? Desk of CA. Praveen Sharma – 917 Series (CAPS) ????

Calcutta High Court in the case of Anjita Dokania, proprietor of M I Telecom

1?? The writ petition challenged a GST demand issued under Section 74 and the validity of search proceedings conducted under Section 67 of the GST law.

2?? After the search, the department blocked the taxpayer’s Electronic Credit Ledger (ECL) under Rule 86A on 9 November 2023.

3?? The petitioner argued that as per Rule 86A(3), blocking of ITC cannot continue beyond one year and the restriction had expired automatically.

4?? Reference was made to Delhi and Punjab & Haryana High Court rulings which held that ECL blockage lapses by operation of law after one year.

5?? The petitioner also contended that the second search was conducted without proper “reasons to believe”, making it legally invalid.

6?? Jurisdiction of the Bureau of Investigation officer to pass the order under Section 74 was also questioned.

7?? The State fairly admitted that Rule 86A does not allow continuation of credit blocking beyond one year.

8?? The Court directed immediate unblocking of the Electronic Credit Ledger, restrained coercive action, and sought an affidavit from the department on jurisdiction and legality of search proceedings.

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Regards
CAPS