The authority must provide adequate reasoning for blocking input tax credits and must properly consider applications for unblocking, as stipulated under the Odisha Goods and Services Tax Rule, 2017.

Judgment :

ARINDAM SINHA, J.

1. Mr. Sahoo, learned senior advocate appears on behalf of petitioner and submits, there was blocking of his client’s entitlement to obtain input tax credit (ITC). Reasons for blocking were supplied by communication dated 20^th May, 2024. Upon getting them his client applied on 22^nd July, 2024 under rule 86A(2) in Odisha Goods and Services Tax Rule, 2017. The application was rejected out of hand without any reason on impugned communication dated 31^st July, 2024. Text of the communication is reproduced below.

“You have filed a petition requesting to unblock the Input Tax Credit that was blocked by the undersigned u/r 86(A)(1)(a) on dated 20.05.2024. However, the subject matter of the case has already been adjudicated by the Hon’ble High Court of Odisha, Cuttack vide WPC no.14540 of 2024. The Hon’ble High Court has disposed of the writ filed by the tax payer. Copy of the order of Hon’ble High Court in this regard is enclosed herewith for your perusal. Accordingly, the petition is disposed of.”

He seeks interference.

2. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and draws attention firstly, to order dated 20^th June, 2024 made in petitioner’s earlier writ petition [W.P.(C) no.14540 of 2024], disposed of by coordinate Bench. He submits, two grounds taken by petitioner, in having moved this Court earlier, were jurisdiction and violation of principles of natural justice. They were rejected. Hence, there is nothing in this writ petition for petitioner to seek exercise of the extraordinary jurisdiction.

3. He relies on orders made by coordinate Benches. First is order dated 31^st July, 2023 made in W.P.(C) no. 22236 of 2023 (M/s. Innojet Projects Pvt. Ltd., Khordha v. The Commissioner of Commercial Taxes & Goods & Services Tax, Cuttack and others) and second, order dated 22^nd September, 2023 in W.P.(C) no.25433 of 2023 (M/s. Bizzare Ispat Pvt. Ltd., Chhatisgarh v. The Commissioner of C.T. & G.S.T., Cuttack and others). According to him apart from petitioner’s said own case, there are two more orders on same view taken that writ petition challenging the blocking, on allegation of jurisdiction or violation of principles of natural justice or both, are not maintainable.

4. He submits further, the application alleged to have been made under sub-rule (2) in rule 86A is a continuation of the grievance regarding jurisdiction and violation of principles of natural justice. As such, the writ petition does not disclose a cause of action and it should be dismissed.

5. Sub-rules (2) and (3) in rule 86A is reproduced below.

“(2) The Commissioner, or the officer authorized by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.”

(emphasis supplied)

It appears, the commissioner or the officer duly authorized in that behalf may unblock, in the period commencing from the blocking till expiry of one year, after which the blocking automatically stands unblocked. On query from Court Mr. Mishra submits, there is no appellate provision in the rules. Thus we find, scope for redressal has been inbuilt into the rule by sub-rule (2).

6. Perusal of impugned communication does not reveal any application of mind by the authority regarding the redressal provision invoked by petitioner. Contention on its behalf has been, the blocking can be done and it was done by due exercise of jurisdiction. Only reasons are required to be given