"GST ITC can not be can not be blocked when no order is issued u/s 74 of CGST Act, 2017 or Rule 86A of the CGST Rules, 2017"

FACTS & SUBJECT MATTER: The Hon’ble Telangana High Court in the case of M/s. A.S.E. India v. Union of India [Writ Petition No. 4756 of 2023 dated 06-11-2023] the Impugned Notice, being in contravention of the provisions of the Central Goods and Services Act, 2017 and Telangana Goods and Services Act, 2017, is set aside, thereby holding that, it would be difficult to sustain the Impugned Notice issued for blocking of ITC when it is neither an order under Section 74 of the CGST Act nor under Rule 86A of the Central Goods and Services Tax Rules, 2017.

CASE LAW: M/s. A.S.E. India v. Union of India (Writ Petition No. 4756 of 2023 dated 06-11-2023)

ISSUE : Whether ITC can be blocked when no order is issues u/s 74 of the CGST Act or Rule 86A of the CGST Rules?

HELD: The Hon’ble Telangana High Court in the case of Writ Petition No. 4756 of 2023 held as under
(1) Noted that, Impugned notice issued is pertaining to the blocking of electronic credit ledger of the Petitioner u/r 86A of the CGST Rules. Also, nowhere it has been stated that the Impugned Notice is an intimation pertaining to proceedings initiated u/s 74 of the TNGST Act.
(2) Opined that, the Impugned Notice issued is not an order of attachment of the ITC account of the Petitioner. Also, it would be difficult to sustain the Impugned Notice issued for blocking of ITC when the Impugned Notice issued is neither an order u/s 74 of the CGST Act nor u/r 86A of the CGST Rules.
(3) Held that, the Impugned Notice, being in contravention with the provisions of the CGST Act and the TNGST Act, is set aside.

Click to download Order in the case of M/s. A.S.E. India Vs. Union of India [Writ Petition No. 4756 of 2023 dated November 6, 2023

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