The court ruled that the petitioner must pursue statutory remedies for disputes regarding fraudulent transactions and that jurisdiction under Article 226 is inappropriate for resolving disputed facts.

JUDGMENT

Petitioner is a registered taxpayer under the Goods and Services Tax Laws. It is a proprietary concern and is engaged in the business of trading scraps. Petitioner challenges an order issued under Rule 86A(1) of the Kerala State Goods and Services Tax Rules, 2017 (for short, ‘the Rules’). It also challenges an order issued under Section 74 of the Central Goods and Services Tax/Kerala State Goods and Services Tax Act, 2017 , (for short, ‘the Act’) imposing tax, interest and penalty for the assessment year 2022-2023.

2. During a special drive for detecting fake registrations, the GST ofÏcials allegedly found the petitioner as having indulged in transactions with Sri. Arunkumar Kuamravelu of M/s. Modern Enterprises and obtained fraudulent Input Tax Credit. It was also alleged that the Input Tax Credit was allegedly claimed by fraud, without any inward supplies, using fake invoices and without actual receipt of goods. Subsequently, after complying with the procedure contemplated under law, the impugned order was issued, imposing a total liability of Rs.20,05,298/- inclusive of tax, interest and penalty. In the meantime, the amount of Input Tax Credit availed by the petitioner available in the electronic credit ledger was also blocked under Rule 86A(1) of the Rules.

3. Petitioner alleges that he has been a bonafide recipient of the goods for valuable consideration and that he had complied with all the conditions required under Section 16 of the Act. It is pleaded that the impugned orders blocking the Input Tax Credit eligible to be utilised by the petitioner and also the order issued under Section 74 of the Act are both without any basis. Petitioner has also pleaded that the power for blocking of electronic credit ledger is drastic in nature and such a disability ought not to be created without complying with the legal and factual requirements. According to the petitioner, the impugned orders were issued without granting an effective opportunity of hearing, and therefore, despite the existence of an alternative remedy, they are liable to be set aside.

4. A counter afÏdavit has been filed by the first respondent alleging that before passing the order under Section 74 of the Act, an opportunity was granted and an Advocate had appeared before the adjudicating authority. It was further stated that the impugned orders are susceptible to appeal under Section 107 of the Act, and therefore, interference under Article 226 of the Constitution of India ought not to be permitted.

5. I have heard Sri. Abraham K.J., the learned counsel for the petitioner and Smt. Dr. Thushara James, the learned Government Pleader.

6. Petitioner is challenging an order blocking the use of Input Tax Credit available in its electronic credit ledger to the tune of Rs.8,88,010/- as per Rule 86A(1) of the Rules. Challenge is also made against an order of adjudication under Section 74 of the Act. A perusal of Exhibit-P7 order reveals that there is a specific reference in the initial paragraph itself that Adv. K. R. Aravindakshan appeared on behalf of the petitioner and he explained the objections filed by the petitioner. Section 75 (4) of the Act stipulates an opportunity of hearing before passing of an order. Though the learned counsel for the petitioner vehemently contended that such an effective opportunity was not granted, this Court is of the view that in the light of the observation in the impugned order mentioned above, the question whether such an opportunity was effectively availed by the petitioner cannot be decided in this proceeding under Article 226 of the Constitution of India, especially since it falls within the realm of disputed facts.

7. Apart from the above, the challenge against Exhbit-P4 order blocking the credit available in the electronic cr