HC directed department to block credit ledger only to extent of demand amount

Case Details: Jyoti Commotrade (P.) Ltd. v. State of West Bengal - [2022] 141 taxmann.com 117 (Calcutta)

Judiciary and Counsel Details

• • T.S. Sivagnanam & Hiranmay Bhattacharyya, JJ.
  • Mainak Bose, Neeraj Kumar Pandey & Shakeel Mohammad Akhter for the Appellant.
  • Anirban Ray, S. Mukherjee & Debasish Ghosh for the Respondent.

Facts of the Case

The electronic credit ledger of petitioner was blocked and registration was suspended on ground that party with whom petitioner had transacted was non-existing at declared place of business and registration was obtained by fraud and wilful misstatement/suppression of fact. It filed application for relief but interim relief sought was rejected by Single Judge Bench. It filed intra court appeal and challenged the order passed by Single Judge Bench.

High Court Held

The Honorable High Court observed that the electronic credit ledger was blocked by the department but till date no show-cause notice (SCN) was issued. Due to pending finalization of the proceedings regarding blocking of the electronic credit ledger by the department, the business activity of the petitioner had come to a standstill. Moreover, the registration was also suspended on account of non-filing of the return. Therefore, the department was directed to unblock credit beyond demand amount indicated and also restore registration to enable filing of return as it would protect the interest of the assessee as well as the department of revenue.