GST Update

 Desk of CA. Praveen Sharma – 976 Series (CAPS) 

BOMBAY HIGH COURT IN THE NZS Traders Pvt. Ltd

In this case, the taxpayer approached the High Court challenging the blocking of input tax credit and attachment of the electronic credit ledger without proper notice or order.

The taxpayer argued that the restriction on credit had continued for more than one year, even though the law clearly provides that such blocking cannot continue beyond this period.

The department also admitted that the restriction cannot remain in force after one year. However, it tried to justify the action on other grounds, including cancellation of registration.

The Court observed that once the prescribed time period of one year has expired, the restriction automatically ceases to exist. There is no requirement for any further order or action from the taxpayer.

Accordingly, the Court held that the blocking of the credit ledger was no longer valid and set aside the attachment.

The Court also clarified that both the taxpayer and the department are free to take further action as per law on other issues, if required.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS