Case Details: Grey Hound Engineers Pvt. Ltd. Versus State of Haryana-(2025) 26 Centax 21 (P&H.)
Judiciary and Counsel Details
- Sanjeev Prakash Sharma & Sanjay Vashisth, JJ.
- Shri Rajiv Agnihotri, Adv. for the Appellant.
- Ms Mamta Singla Talwar, DAG for the Respondent.
Facts of the Case
The petitioner, an assessee under the Central Goods and Services Tax Act, 2017 (“the Act”), challenged the prolonged blocking of its bank account and Input Tax Credit (ITC) amounting to Rs. 32,70,384. A show cause notice was issued under Section 74 of the Act, alleging that the petitioner had availed ITC using fake invoices from firms that were later found to be non-existent. The petitioner filed a reply contesting these allegations. However, despite the lapse of over one and a half years, the tax authorities had not passed a final adjudication order. The petitioner approached the Punjab and Haryana High Court, contending that the prolonged blocking of its account and ITC was unjustified and severely impacted its business operations. The petitioner sought immediate relief, arguing that pending adjudication, it should be allowed to operate its account, as its business activities had been adversely affected due to the ongoing restrictions.
High Court Held
The Hon’ble High Court held that the prolonged blocking of the petitioner’s account and ITC without passing a final order was unjustified. The Court directed the tax authorities to issue a final order within 30 days from the date of judgment. Further, it ruled that the petitioner should be allowed to operate its account, provided that a surety to the tune of Rs. 32,70,384 was furnished. The Court emphasized that while tax authorities have the power to block ITC under Section 86-A of the Act, such action should not result in indefinite hardship to businesses, and any investigation must be concluded within a reasonable timeframe. The writ petition was accordingly disposed of, with all interim orders vacated.
