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February 2023

Goods and Services Tax

By Puloma Dalal | Jayesh Gogri | Mandar Telang
Chartered Accountants
Reading Time 15 mins

66 Sunny Jain vs. UOI

[2022] 145 Taxmann.com 601 (Del)

Date of order: 5th December, 2022

The non-payment of consideration within a period of 180 days cannot be the ground for blocking ITC in terms of Rule 86A of the CGST Act. The ineligible credit mentioned in Rule 86A covers only such ITC which has suffered ineligibility on account of situations mentioned in the said Rule and not any other cases of ineligibility. Rule 86A is a drastic measure and has to be construed strictly.

FACTS

The petitioner challenged the action of the GST officer blocking a certain amount of ITC which was credited to the Electronic Credit Ledger (ECL) of the petitioner. The assessee was intimated about the said blockage of ITC by email without any inquiry and without affording the petitioner opportunity of being heard. The petitioner had earlier filed his objection with the department for blocking of the ITC for a period of eighteen months contending that it has been done without inquiry and is beyond the time limit prescribed in Rule 86A of the CGST Act. The petitioner also submitted various documents called for by the GST officer. The GST officer directed the petitioner to deposit the interest

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