2024(11)LCX0471

S S Con Cast Private Limited

Versus

Union of India

CWP- 19104-2024 decided on 18-11-2024

CM-18640-CWP-2024 in/and
CWP-19104-2024(O&M) and
CWP-19806-2024

M/S S S CON CAST PRIVATE LIMITED

VS.

UNION OF INDIA AND ORS

Present:     Mr. Rishab Singla, Advocate
                 for the applicant-petitioner
                 (in CWP-19806-2024)

                   Ms. Sneha Ghosh, Advocate
                   for the petitioner
                    (in CWP-19104-2024).

                    Ms. Sharmila Sharma, Senior Panel Counsel
                    for the respondents.

CM-18640-CWP-2024 in CWP-19104-2024(O&M)

Application for placing record the replication is allowed.

Replication is directed to be placed on record accordingly.

CWP-19104-2024(O&M) and CWP-19806-2024

Reply as well as rejoinder have been filed.

Learned counsel for the petitioner submits that while the High Courts of Delhi, Gujarat and Telangana have held that there is no power available with the respondents under Rule 86 (A) of the CGST Rules, 2017 (for short “the Act”) to negatively block the electronic credit ledger whereas the High Courts of Allahabad and Calcutta have held it otherwise.

Learned counsel for the petitioner has also invited attention to the judgment passed by the Punjab and Haryana High Court in ‘K.J. International Vs. State of Punjab’ 2023 (12) Centax 106 (P&H), to submit that the negative blocking of the input tax credit ledger beyond 10% of the demand is unjustified. In other words, the Court has observed that the account cannot be blocked beyond 10% of the penalty amount assessed as that is the condition of pre-deposit for filing of an appeal against the order passed under Section 73 and 74 of the Act.

The issue requires to be examined at length, however, at this stage, we allow the respondents to block 10% of the tentative amount of demanded tax, which may be assessed provisionally and unblock the ITC to that extent.

List on 10.12.2024.

A photocopy of this order be placed on the file of another connected case.

(SANJEEV PRAKASH SHARMA)
JUDGE         

(SANJAY VASHISTH)
JUDGE         

November 18, 2024