Case Details: V.V. Iron Steel Company Pvt. Ltd. v. Assistant Commissioner, Central GST and Central Excise, Tirunelveli Division (2026) 41 Centax 46 (Mad.)
Judiciary and Counsel Details
- Krishnan Ramasamy, J.
- S/Shri S. Silambannan, Sr. Counsel & T. Bashyam, for the Petitioner.
- Shri R. Gowrishankar, for the Respondent.
Facts of the Case
The petitioner company was engaged in business and had filed a writ petition seeking the unblocking of input tax credit in its electronic credit ledger to enable utilization towards GST liabilities. The department had blocked the electronic credit ledger because the petitioner had allegedly undertaken transactions with non-existent dealers and availed credit based on fake invoices during the course of the investigation. The petitioner submitted a representation for unblocking of the credit ledger, which remained pending consideration, and relied upon judicial precedent to contend that reasons for such action were required to be communicated and decided by way of a speaking order. The department, on the other hand, sought time to consider the representation. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that prior notice was not mandatory before blocking the electronic credit ledger under Rule 86A of the CGST Rules. It, however, observed that the authority was required to record reasons in writing for such blocking and communicate the same to the affected person. The Court further held that upon receipt of objections, the authority was required to afford an opportunity of hearing and thereafter pass a reasoned speaking order either revoking or sustaining the blocking of credit. In the facts of the case, since the representation submitted by the petitioner was pending, the Court directed the authority to consider the same along with any additional material that may be furnished. It was further directed that a personal hearing be granted and a speaking order be passed within a fixed timeline. Accordingly, the writ petition was disposed of with such directions.
List of Cases Cited
- HEC India LLP v. Commissioner — W.A. No. 2341 of 2021, decided on 16-9-2021 by Madras High Court — Referred [Paras 2, 6, 7]
