Karnataka High Court
M/S Aaiz Steel vs The Assistant Commissioner Of on 27 February, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:7988
WP No. 16117 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No. 16117 OF 2023 (T-RES)
BETWEEN:
M/S AAIZ STEEL
A PROPRIETORSHIP CONCERN
NO.9, SHOP NO.4, GROUND FLOOR
P & T LAYOUT, 2ND STAGE, 2ND PHASE
RAJIV NAGAR, MYSORE - 570 019.
REP. BY ITS PROPRIETOR
MOHAMMED VASIF
SON OF SRI MUMTAZ PASHA
AGED ABOUT 30 YEARS.
...PETITIONER
(BY SRI. SHREEHARI KUTSA, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES, LGSTO-205
Digitally signed by MYSURU.
LAKSHMINARAYANA
MURTHY RAJASHRI SHESHADRI IYER BUILDING, DEEWANS ROAD,
Location: HIGH MYSURU - 570 004.
COURT OF
KARNATAKA THE PROPER OFFICER UNDER THE
CGST/KGST ACT, 2017.
2. JOINT COMMISSIONER OF CENTRAL TAX
(APPEALS), MYSURU DIVISION, MYSURU
GST BHAVAN, VINAYAMARGA
SIDDARTHA NAGAR
MYSURU - 570 011.
THE APPELLATE AUTHORITY UNDER
THE CGST/KGST ACT, 2017.
...RESPONDENTS
(BY SRI HEMA KUMAR K, AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSITITUTION OF INDIA PRAYING TO QUASHING THE ORDER
BEARING NO. 23/2022-23 DATED 20/08/2022 ISSUED BY THE R1 IN
-2-
NC: 2024:KHC:7988
WP No. 16117 of 2023
EXERCISE OF AUTHORITY VESTED IN RULE 86A OF CGST RULES, 2017
AND ENCLOSED AS ANNEXURE-B AND QUASHING THE ORDER UNDER
SECTION 107(11) OF THE SGST/GCST ACT, 2017 BEARING APPEAL NO.
GST/AT/101/2022-23 DATED 30/05/2023 ISSUED BY THE R2 AND
ENCLOSED AS ANNEXURE-L.
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE COURT
MADE THE FOLLOWING:
ORDER
In this petition, petitioner seeks quashing of impugned order
dated 20.08.2022 passed by first respondent under Rule 86(A) of
CGST Rules, 2017, blocking of Input Tax Credit of the petitioner
which was confirmed by the first Appellate Authority, vide
Annexure-L dated 30.05.2023.
2. Heard learned counsel for the petitioner and learned
counsel for respondents and perused the material on record.
3. Learned counsel for the petitioner submits that apart
from the various other contentions urged to the petition, in light of
the undisputed fact that the impugned order dated 20.08.2022 can
remain in force only for a period of one year, as stipulated in Sub-
Rule 3 of Rule 86(A) of the CGST Rules, blocking of the Input Tax
Credit of the petitioner would necessarily have to be unblocked
after expiry of the prescribed period of one year which came to an
end on 20.08.2023. It is therefore submitted that while the
NC: 2024:KHC:7988
impugned order at Annexure- B deserves to be set aside, the
impugned order challenging Annexure - L, does not survive for
consideration in this petition any longer. In this context, reliance is
placed upon the judgment of this Court in the case of S.P.Metals
Vs. Assistant Commissioner of Central Tax reported in (2024)
158 taxmann.com 273 (Karnataka).
4. Per contra, learned Additional Government Advocate
for the respondents does not dispute that blocking of the Input Tax
Credit of the petitioner is valid only for a period of one year from the
date on which the order is passed and the same has expired on
20.08.2023. It is therefore submitted that an appropriate order be
passed by this Court in this regard.
5. In S.P.Metal case supra, this Court has held as under:
"In view of the aforesaid facts and circumstances and the
submission made by both sides and in the light of the
undisputed fact that one year as stipulated in Sub-rule (3)
of Rule 86A CGST Rules, 2017 came to an end on
11.05.2023 in so far as petitioner was concerned,
question of respondents continuing to block ITC of the
petitioner is clearly illegal and arbitrary and the same
deserved to be unblocked by issuing necessary directions
in this regard."
NC: 2024:KHC:7988
6. As rightly contended by the learned counsel for the
petitioner, upon expiry of a period of one year as contemplated
under Sub-Rule (3) of Rule 86(A) of the CGST Rules, which came
to an end on 20.08.2023, impugned order at Annexure-B deserves
to be quashed and respondents are directed to unblock the Input
Tax Credit of the petitioner, within stipulated time period.
7. In the result, the following:
ORDER
1. The petition is hereby allowed.
2. Respondent No.1 is directed to unblock the Input
Tax Credit (ITC) of the petitioner as directed in the
impugned order at Annexure-B, within the period of one
week from today.
Sd/-
JUDGE
GH
