Order date – 28 July 2022

Facts – 

• The Appellants, BASANTA KUMAR SHAW, PROPREITOR OF M/S. N.M.D. ENGINEERING WORKS, was issued three show-cause notices which were served in 20.01.2022 and 28.01.2022. 
• It was stated that in terms of Section 42(1) (a) of WBGST / CGST Act there is a mismatch between the appellant’s input tax credit Form GSTR-2A (auto-populated) from details of outward supplies furnished by the appellant’s suppliers in their respective GSTR-1 and GSTR-3B for the tax periods from April 2018 to March 2021.
• On 30.03.2022 the appellant made a payment of Rs. 10 lakhs but did not submit their reply to the show-cause notices within the time permitted.
• On 13.06.2022 the appellant filed their reply to the said show-cause notices but the said penalty was confirmed.
• Even before filing the reply dated 13.06.2022, the appellant approached this Court and filed the writ petition which was affirmed on 6th June, 2022. The writ petition has been disposed of by order dated 20.06.2022.
• Aggrieved the appellant filed an appeal.

Issue – 

• Whether disallowance of debit of IGST from the electronic credit ledger in exercise of the power conferred under Rule 86A of the Central Goods and Services Tax Rules, 2017 is justifiable?

Order – 

• The Court observed that the availment of input tax credit is not a vested right. The right conferred on the appellant is regulated by the provisions of the Act and it is a concession granted under the statute and unless and until the appellant complies with all the conditions scrupulously, they would not be entitled to avail the input tax credit. 
• Also, it was observed that the appellant has not been prevented from carrying on his business activities, all that has been done is to prevent him from operating the electronic credit ledger.
• Since as the show cause notice was yet to be adjudicated the court refrained to express any opinion, the respondent was directed to consider the reply given by the appellant dated 13.06.2022 and afford an opportunity of personal hearing to the appellant.