2026-VIL-1248-MP
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SGST High Court Cases

GST - Blocking of Electronic Credit Ledger under Rule 86A of the CGST Rules and bar on parallel proceedings under Section 6 of the MPGST Act, 2017 - Petitioner's Electronic Credit Ledger was blocked under Rule 86A for alleged availment of ITC without valid invoices or debit notes - Petitioner contended that the Central GST authorities had already conducted search, verification and concluded proceedings on the same subject matter and tax period after payment through Form GST DRC-03, that State proceedings were therefore barred by cross-empowerment under Section 6, and that no valid reasons to believe were recorded nor was any opportunity of hearing afforded - Respondents contended that the earlier proceedings pertained to a distinct issue of clandestine removal, while the present proceedings arose from a separate investigation by the Anti-Evasion Bureau into bogus ITC passed on by certain suppliers - Whether the blocking of the Electronic Credit Ledger is sustainable in view of Section 6 and Rule 86A - HELD - Section 6 of the MPGST Act prohibits parallel proceedings only in respect of the same subject matter. The present proceedings relate to a separate transaction and a fresh cause of action, hence Section 6 is not attracted. Rule 86A empowers the proper officer to block the Electronic Credit Ledger where there are reasons to believe that the ITC has been fraudulently availed or is otherwise ineligible. The proper officer formed such belief on the basis of the investigation report received from the Joint Commissioner, State Tax, Anti-Evasion Bureau. No ground is made out for interference and the writ petition is dismissed
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