GST CASE LAW 30 / 21-22 HC: Directs Revenue to de-block ITC citing expiry of 1 year from restriction being imposed

AS Steel Traders (VSP) Pvt Ltd vs. Union of India

Oct 20, 2021

• AP HC on observing that Rule 86A of CGST Rules, 2017 specifies that ITC blocking will cease to have effect after the expiry of one year from the date of imposing such restriction,
• directs Revenue to de-block the ITC and permit the Assessee to utilize the blocked ITC;
• Revenue contended that the Assessee had purchased Steel products from one company, who admitted manipulation done by it in GST Tax returns and since it had not paid GST, the Assessee was not entitled to any relief;
• Perusing the Rule under dispute, HC states that Rule 86-A (3) is very specific to the effect that the restriction imposed i.e. blocking of ITC will cease to have effect after the expiry of one year from the date of imposing such restriction, and there being no dispute around period of one year having elapsed from the date of restriction imposed in the form of blocking the ITC therefore, HC affirms Assessee’s submission:HC AP

Source: TaxSutra   [TS-544-HC(AP)-2021-GST]

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Disclaimer: Update is meant for information purpose only and does not purport to be advice or opinion. It is prepared based on the understanding of the provisions as applicable as on date. The author is not responsible for any error or omission or for any action taken based on its contents.