ITC in Electronic Credit ledger blocked cannot continue beyond one year

Petitioner: M/s Vimal Petrothin Pvt Ltd

Respondents: Commissioner, CGST & Others

Authority: Uttarakhand High Court

Date: 24th June 2021

Case: Petitioner is having a manufacturing unit at Haridwar. Its ITC was provisionally blocked on the ground that the petitioner had availed ITC amounting to Rs. 1.50 crores based on fake invoices issued by non-existing firms. Writ Petitions were filed to unblock the ITC availed by the petitioner in its electronic credit ledger

Core Issue: Whether ITC in e credit ledger can be blocked beyond one year?

Court’s Observation: Continuance of blockage of petitioner’s electronic credit ledger cannot continue beyond one year.

Judgement: Respondent is directed to unblock the input tax credit availed by the petitioner in its electronic credit ledger. However, this will not preclude the respondents from taking such action against the petitioner, as is permissible under the law.