Commissioner Has the Right to Block GST ITC Under Rule 80A: Orissa HC Sets Aside Petition

The writ petition has been rejected by the Orissa High Court contesting the jurisdiction ruling that the Deputy commissioner can block Input Tax Credit ( ITC ) under Rule 86A of Orissa GST ( Goods and Services Tax ) Rules, 2017.

The applicant, Atulya Minerals, aimed to quash the letters issued by the Deputy Commissioner dated 30.03.2024 and 20.05.2024, claiming that the officer does not have the jurisdiction to pass such orders and that the orders were issued without following the principles of natural justice.

The counsel of the applicant Mr J.M. Patnaik claimed that the orders were not sustainable in law as the Deputy Commissioner, being a State Tax official, could not legally block GST input tax credit (ITC). He argued that the orders were issued without due process, as directed under the principles of natural justice.

The applicant has laid on a circular issued via the Principal Commissioner (GST) of the Government of India, which was addressed to the Central tax officers, to assist their case. Mr Sunil Mishra, the Counsel for the Revenue, claimed that the circular quoted via the applicant does not apply to the state GST since it was particularly addressed to the Central tax authorities.

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He stressed that Rule 86A(1) of the OGST Rules, 2017, explicitly empowers the commissioner or an officer authorized through him, not below the rank of Assistant Commissioner, to restrict ITC. As the Deputy Commissioner who has a higher rank than an Assistant Commissioner, issued the impugned orders they were well under his jurisdiction.

After hearing both sides, the bench of Justices B.R. Sarangi and G. Satapathy, kept the validity of the orders, quoting Rule 86A(1) of the OGST Rules, 2017, which authorized such measure via an authorized officer of the appropriate rank.

Also, the court remarked that till now as the contention raised concerning the circular issued via the Government of India on 02.11.2021 under Annexure-2 is concerned, that ipso facto could merely apply to the Central GST and not to the State GST until the cited circular has chosen by the State government through making a declaration. Nothing has been put on record to illustrate that the said circular has been embraced by the State Government for State GST.

The petition was disposed of as the high court refused to entertain the petition.

Case Title	M/s. Atulya Minerals Vs Commissioner of State Tax
Citation	W.P.(C) No. 14540 of 2024
Date	20.06.2024
For the Petitioner	Mr J.M. Patnaik
For Respondents	Mr Sunil Mishra
Orissa High Court	Read Order