??Desk of CA. Praveen Sharma Series- 543?? BOMBAY HIGH COURT IN THE CASE OF Seya Industries Limited Rule 86A of the CGST Rules, 2017
CA. Praveen Sharma (Corporate Trainer)
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??The petitioner, a manufacturer of specialty chemicals, faced an investigation by the Directorate General of GST Intelligence (DGGI), Nagpur, in 2017. Concurrently, the petitioner filed for insolvency under the Insolvency and Bankruptcy Code (IBC), which was initially admitted, set aside, and currently has another IBC application admitted.
??On September 23, 2022, DGGI issued a show-cause notice regarding alleged inadmissible Input Tax Credit (ITC) for FY 2017-18 to FY 2019-20. Consequently,
??DGGI blocked Rs. 9.07 crore from the petitioner's Electronic Credit Ledger and created a negative balance of Rs. 97.46 crore, blocking a total of Rs. 106.53 crore.
??The petitioner sought court relief to quash the ITC blocking, arguing that under Rule 86A(3) of the CGST Act, the blocking cannot exceed one year, which lapsed on November 23, 2023.
??The court agreed, noting that the blocking period had expired and was no longer valid.
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CA. Praveen Sharma