The Central government’s GST circular can only be applicable to the Central GST and not to the State GST unless the said circular is adopted by the State Government by making a declaration

The Orissa High Court rejected the writ petition challenging jurisdiction ruling that the Deputy commissioner can block Input Tax Credit ( ITC ) under Rule 86A of Orissa GST ( Goods and Services Tax ) Rules, 2017. The petitioner, Atulya Minerals, sought to quash the letters issued by the Deputy Commissioner on 30.03.2024 and 20.05.2024, arguing that the officer lacked the jurisdiction to pass such orders and that the orders were issued without following the principles of natural justice. Get a Copy of GST on Services Ready Reckoner, Click here The petitioner’s counsel, Mr. J.M. Patnaik, argued that the orders were unsustainable in law because the Deputy Commissioner, being a State Tax official, could not legally block ITC. He further contended that the orders were issued without due process, as required by the principles of natural justice. The petitioner also relied on a circular issued by the Principal Commissioner (GST) of the Government of India, which was addressed to Central Tax officers, to support their case. Mr. Sunil Mishra, the Counsel for the Revenue, argued that the circular cited by the petitioner did not apply to the State GST, as it was specifically addressed to Central Tax authorities. He emphasised that Rule 86A(1) of the OGST Rules, 2017, explicitly authorises the Commissioner or an officer authorised by him, not below the rank of Assistant Commissioner, to block ITC. Since the Deputy Commissioner, who is of higher rank than an Assistant Commissioner, issued the impugned orders, they were well within his jurisdiction. Get a Copy of GST on Services Ready Reckoner, Click here The bench of Justices B.R. Sarangi and G. Satapathy, after hearing both sides, upheld the validity of the orders, citing Rule 86A(1) of the OGST Rules, 2017, which allowed such action by an authorised officer of the appropriate rank. The Court also noted that “So far as the contention raised with regard to the Circular issued by Government of India dated 02.11.2021 under Annexure-2 is concerned, that ipso facto can only applicable to the Central GST and not to the State GST unless the said circular is adopted by the State Government by making a declaration. Nothing has been placed on record to show that the said circular has been adopted by the State Government for State GST. The high court refused to entertain the petition, thus it was disposed of.