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*Electronic credit ledger cannot be blocked for more than one year: Gujarat High Court*

*In the Favour of Taxpayer*

*Issue*

The proper officer has blocked the Electronic Credit Ledger of the taxpayer. Whereas period of more than one year elapsed from the date of order of blocking the Credit Ledger. Can Department continue to block the ledger beyond 1 year?

*Held*

H’ble Gujarat High Court in the case of Ambika Creations have held that as per sub rule (3) of Rule 86A, the electronic credit ledger of the taxpayer can be blocked for 1 year from the date of order. It is the duty of the department to ensure that the credit is made available to the taxpayer upon expiry of one year or it should initiate fresh proceedings. In any circumstance the Electronic Credit Ledger cannot be blocked for more than on year.

*Our View*

H’ble High Court has rightly held that the proper officer cannot surpass the law in any condition. When the law explicitly provides that the ledger cannot be blocked for more than a year, it was illegal to continue to block the ledger beyond that. The judgment gives a clear message the proper officer can act only within the boundaries of law.

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