2026-VIL-106-CAL
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SGST High Court Cases

GST - Unblocking of Electronic Credit Ledger and Initiation of Adjudication Proceedings – Rejection of prayer for unblocking of electronic credit ledger but refusal to initiate and conclude adjudication proceedings despite the petitioner’s request - Whether the Proper Officer's observation that the "act of violation is not suitable for adjudication" can be sustained – HELD - The provisions of Rule 86A of the CGST Rules, 2017 which allow the revenue authorities to withhold debit of an amount equivalent to the credit in the electronic credit ledger, are clearly aimed at securing the tax apprehended to be in default either due to fraudulent availment of ITC or availment of ITC despite ineligibility. This is an interim measure pending adjudication, and the Proper Officer cannot refuse to conduct adjudication. Once the provision of Rule 86A is resorted to, it cannot be said by the Proper Officer that adjudication itself cannot be done - The Proper Officer's observation that the "act of violation is not suitable for adjudication" cannot be sustained. The Proper Officer is directed to initiate adjudication proceedings by issuing a show cause notice to the petitioners within a week, allow the petitioners to file a reply within a week thereafter, and conclude the adjudication proceedings by passing an appropriate order within three weeks from the date of receipt of the petitioners' reply. If the adjudication proceedings are not concluded within the stipulated time, the Proper Officer shall have to unblock the electronic credit ledger of the petitioners - The writ petition is disposed of
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