ITC cannot be blocked when no order is issued u/s 74 of the CGST Act or Rule 86A of the CGST Rules

Last updated: 11 December 2023

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Quick Summary

The Telangana High Court has ruled that Input Tax Credit (ITC) cannot be blocked if the notice issued is not in accordance with Section 74 of the CGST Act or Rule 86A of the CGST Rules. In a case involving M/s. A.S.E. India, the court found the notice for blocking ITC to be illegal and set it aside. The judgement clarifies that such blocking actions are only permissible under specific legal provisions, which were not met in this instance.

Court :
Telangana High Court

Brief :
The Hon'ble Telangana High Court in the case of M/s. A.S.E. India v. Union of India[Writ Petition No. 4756 of 2023 dated November 6, 2023]the Impugned Notice, being in contravention of the provisions of the Central Goods and Services Act, 2017 ("the CGST Act") and Telangana Goods and Services Act, 2017 ("the TNGST Act"), is set aside, thereby holding that, it would be difficult to sustain the Impugned Notice issued for blocking of ITC when it is neither an order under Section 74 of the CGST Act nor under Rule 86A of the Central Goods and Services Tax Rules, 2017 ("the CGST Rules").

Citation :
Writ Petition No. 4756 of 2023 dated November 6, 2023

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