TMI Blog2021 (9) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... t available in electronic credit ledger of a person can be by way of a temporary measure for a period not exceeding one year. The decision to impose such restriction would be taken by the Commissioner or a person authorised by him upon being satisfied that the input tax credit has been fraudulently availed or is ineligible. In such a case, after recording reasons in writing restriction on use therefore of would be imposed. This is an interim measure and, therefore, cannot take shape of a permanent arrangement. This is an interim measure and, therefore, cannot take shape of a permanent arrangement. If the department wants to permanently disallow credit of accumulated amount in the ledger of a dealer, it must adjudicate the issue and pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of such supply. The case of the petitioner is that having paid CGST on the purchases made from a registered dealer, the petitioner thereafter has no control over the seller to ensure that such tax is deposited with the Government revenue as is statutorily is his obligation. Denying to the petitioner input tax credit on such purchases on which the petitioner has already paid tax on the ground that the selling dealer did not deposit the tax with the Government revenue would amount to double taxation. Learned counsel for the petitioner pointed out that this provision has been challenged by different dealers before sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Attorney General. Learned Asstt. Solicitor General Mr. Bidyut Majumder waived notice on behalf of respondent No.1, Union of India, as well as the learned Attorney General. Learned counsel Mr. Paramartha Datta waived notice on behalf of respondents No.2 and 3. For the limited purpose of considering the petitioner s request for interim relief for removing attachment of the Tax Credit Account, let notice be returnable on 23.08.2021. Today we have heard learned counsel for the parties on interlocutory application (IA No.1/2021) filed by the petitioner for interim relief. Learned counsel for the petitioner pointed out that as can be seen from demand-cum-show cause notice, dated 7th January 2021, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner had exercised powers under Rule 86A of the said rules. Chapter IX of the said Rules pertains to payment of tax. Rule 86 refers to electronic credit ledger which shall be maintained in relation to the registered dealer where his eligible input tax credit would be accumulated for the purpose of discharging his tax liability to the Government. Rule 86A however provides conditions of use of amount available in such electronic credit ledger. As per sub-rule (1), the Commissioner or an officer authorized by him in this behalf, having reason to believe that credit of input tax available in electronic credit ledger has been fraudulently availed or is ineligible for the reasons stated in Clauses (a) to (d) contained therein, he m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trictions shall cease to have effect after the expiry of a period of one year. Two things are significant in this sub-rule; first, there is no scope of extension of this time and secondly, upon expiry of a period of one year the effect of the restriction seizing to take effect would be automatic. Under the circumstances, department cannot continue to subject the petitioner s electronic credit ledger to the restrictions imposed by the Commissioner, on 21st May 2020. The same shall be released. In other words, it would be open for the petitioner to utilise the amount credited in the said ledger for the purpose of payment of its taxes in accordance with law. At this stage, we are not inclined to grant any further relief of either staying ..... X X X X Extracts X X X X X X X X Extracts X X X X
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