IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 16403 of 2025 ==========================================================

GAJ ALLOYS PRIVATE LIMITED & ANR.

Versus THE STATE OF GUJARAT & ANR.

==========================================================

Appearance:

MR ABHAY Y DESAI(12861) for the Petitioner(s) No. 1,2 MS. NIMISHA PAREKH, AGP for the Respondent(s) No. 1,2 ==========================================================

CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 11/12/2025

ORAL ORDER

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. The writ petitioner was constrained to file the writ petition for unblocking of Input Tax Credit (ITC) of Rs.22,53,426/- made on 10.03.2021 in the Electronic Credit Ledger (ECL). After the order dated 04.12.2024, where we had directed the learned Assistant Government Pleader to take instructions for unblocking of the Input Tax Credit, today, learned Assistant Government Pleader Ms.Parekh has tendered the note for unblocking the ITC and the Electronic Credit Ledger has been unblocked.

2. At this stage,Mr. Abhay Desai, learned advocate for the petitioners has pointed out the directions issued by this Court in a similar issue of unblocking the ITC in the case of M/s.Ambika Creation vs. Commissioner, Govt. of Gujarat, 2022 (58) G.S.T.L. 513 dated 12.1.2022, and has submitted that the Court, in identical facts, had observed that in case the concerned authorities would repeat the same act of blocking the Input Tax Credit, then such officer would be personally liable for the loss which the assessee has might have suffered.

3. We may, at this stage, incorporate the observations of the Division Bench, as under::

“3. Today, when the matter is taken up for hearing, the Learned AGP Mr. Utkarsh Sharma has appeared on behalf of the respondent authorities and has fairly stated that the period of one year has elapsed in terms of sub-rule (3) of Rule 86A of the CGST Rules, 2017 and GGST Rules, 2017.

4. The rule itself has provided that the Electronic Credit Ledger can be blocked for a period of one year. On expiry of a period of one year, it would automatically get unblocked. In fact, it was the duty of the authority concerned to permit the assessee, i.e. the writ-applicant, to avail the input credit available in his ledger. Once the statutory period comes to an end, the authority has no further discretion in the matter, unless a fresh order is passed. In the case on hand, it is very unfortunate to note that despite the fact that the period of one year elapsed, the authority did not permit the writ- applicant to avail the credit available in his ledger. Even representation was filed in this regard but the authority thought fit not to pay heed to such representation.

5. We may further note that the authority did not permit the writ- applicant to avail the input credit available in his ledger for about more than two and a half months after the statutory life of the order came to an end.

6. We make it clear that next time if we come across such a case, then the concerned authority would be held personally liable for the loss which the assessee might have suffered during the interregnum period.”

4. In the present case, the Input Tax Credit of Rs.22,53,426/- has been blocked for almost more than four years, which is beyond the limitation of one year. Hence, it is a fit case where exemplary personal costs are required to be imposed upon the officer who is responsible for blocking Input Tax Credit beyond the period of one year.

5. Thus, in in light of the fact that the Input Tax Credit of Rs. 22,53,426/- made on 10.03.2021 in the Electronic Credit Ledger has remained blocked for almost more than four and a half years, we direct the respondent to deposit a cost of Rs.35,000/- before the Registry of this Court by the next date of hearing.

6. The matter is ordered to be listed on 18.12.2025 on the top of the Board

7. It is interesting to note that the petitioner has i