Judge saravanan Madras HC Directs GST Authorities to Reconsider Blocked ITC Claim and Pass Orders Within Four Weeks [
[27/10, 07:59] Sekarreporter: [27/10, 07:59] Sekarreporter: Madras HC holds that even if reply to notice is filed belatedly (after the due date specified in the notice), the adjudicating authority is bound to grant a hearing after receipt of the reply, if he chooses to confirm the demand, being unsatisfied with the reply. Sec. 75(4) of the CGST Act.
[27/10, 07:59] Sekarreporter: 👍👍
[27/10, 08:04] Sekarreporter: “Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, quashing the impugned Detailed Order No.33ACSFS5348H1ZO/2020-21 dated 25.02.2025 along with the summary order bearing DRC 07 Reference No.ZD330225265052U dated 26.02.2025, passed by the Respondent as being arbitrary and not sustainable and thus render justice.
For Petitioner : Mr.G.Natarajan
For Mohammed Zuhyar”
[29/10, 09:13] Sekarreporter: “Top
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Madras HC Directs GST Authorities to Reconsider Blocked ITC Claim and Pass Orders Within Four Weeks [
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The petitioner submitted that all relevant documents, including e-way bills, invoices, payment slips, and bank details, had been furnished to establish the genuineness of the transactions
By – Sneha Sukumaran Mullakkal |
28 Oct 2025 6:30 PM
The High Court of Madras, directed the Goods and Service Tax ( GST ) authorities to reconsider the blocked Input Tax Credit ( ITC ) of the petitioner and pass appropriate orders within four weeks.
V V Steels,petitioner-assessee, was under the jurisdiction of the first respondent, the Assistant Commissioner of GST and Central Excise. The petitioner had entered into transactions with PSN Traders, falling under the jurisdiction of the second respondent, the State Authority.
Since PSN Traders was found to be operating without a physical place of business, proceedings were initiated against it, resulting in the cancellation of its registration. Relying on this information, the first respondent subsequently blocked the petitioner’s Input Tax Credit on 12.12.2024
The petitioner counsel submitted that the first respondent had, on 28.05.2025, written to the second respondent stating that the petitioner had furnished all necessary documents, including e-way bills, invoices, payment slips, and bank details related to PSN Traders, and that the transactions appeared to be in order.
The counsel argued that the first respondent was required to act under Section 86A(2) of the GST Rules. Referring to the Central Board of Indirect Taxes and Customs ( CBIC ) guidelines dated 02.11.2021, the counsel pointed out that authorities could allow the use of blocked credit if it was later found to be valid and that such restrictions automatically ceased after one year.
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The first respondent’s counsel stated that the petitioner’s request for unblocking the Input Tax Credit would be considered based on subsequent developments. It was also noted that the petitioner had approached the Court soon after filing the representation, leaving no time to pass an order under Rule 86A.
Both counsels for the respondents submitted that the investigation relating to PSN Traders was still ongoing and, therefore, the blocked credit need not be released during the one-year restriction period under Rule 86A(2).
Justice C.Saravanan after hearing both sides and noting the communication from the Superintendent in the Office of the first respondent to the second respondent, directed the first respondent to pass suitable orders after obtaining necessary inputs from the second respondent.
The Court instructed that this process be completed at the earliest, preferably within four weeks from the date of receiving the order.
It was further directed that the petitioner be given an opportunity of hearing before any such order was passed. The writ petition was disposed of with these directions, without any order as to costs, and the connected miscellaneous petition was closed.
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Sneha Sukumaran Mullakkal
Sneha Sukumaran Mullakkal is a graduate in Business Administration and Law with a keen interest in laws impacting everyday lives. She is a passionate dancer who also finds joy in singing and drawing. With a strong commitment to making legal concepts accessible and relevant to the common person, she brings a unique blend of analytical thinking and artistic expression to her work.
Madras High Court
Input Tax Credit
Central Board of Indirect Taxes and Customs
Justice C.Saravanan
GST authorities
ITC Claim
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