Uttarakhand High Court Slams GST Dept. For Arbitrary Action Against Businesses

The Uttarakhand High Court has slammed the Goods and Service Tax (GST) department for arbitrary action against businesses by blocking Input Tax Credit (ITC).

The bench of Chief Justice G. Narendar and Justice Alok Mahra have observed that The working of the Department is startling and shocking. It is not known and incomprehensible as to which provision of law permits the Department to take deterrent and coercive action, even prior to issuance of pre-intimation notice.

The bench added that the act complained of is akin to imposition of punishment and then conducting the trial. The conduct of the Department is deplorable. The aim and objective of the GST Act, in our considered opinion, is not to destroy businesses or ensure their closures. The GST regime was brought-in with the objective of ensuring tax compliances, and not with the intent or objective of ensuring loss of livelihoods.

“We hope that the Department will bear this in mind. The growth of businesses and sustenance of businesses is vital for employment generation and growth of the Nation. If the Department can bear this in mind and act in consonance with the stated objectives of the Act, it would be rendering yeomen service to the business community. Such actions reflect a mind set, which we do not wish to name here,” the bench said.

The court while listing the matter on 29.04.2025 held that there shall be an interim order, as prayed for, and any action shall be duly in compliance with the provisions of the GST Act.

Case Details

Case Title:  Kotdwar Steel Limited v. Office of the Deputy Commissioner Kotdwar

Case No.: Civil Writ Petition No. 47 Of 2025

Date: 28.03.2025

Counsel For Petitioner: Rakesh Prasad Singh and Kanti Ram Sharma

Counsel For Respondent:  Puja Banga

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Mariya Paliwala

Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.

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