The Patna High Court has dismissed a writ petition challenging the blocking of input tax credit (ITC) and cancellation of GST registration, holding that the petition lacked merit and that interference would be inappropriate, particularly in light of an ongoing investigation under the GST framework.

The bench of Justice Rajeev Ranjan Prasad and Justice Soni Shrivastava has observed that the cancellation order issued in Form GST REG-19 did contain reasons and was in accordance with the statutory framework. It emphasized that Rule 21(e) clearly provides for cancellation of registration where ITC is availed in violation of Section 16, which governs eligibility and conditions for availing ITC. 

The petitioner company sought quashing of an email communication dated July 21, 2025, issued by GST authorities blocking ITC, as well as an order dated December 10, 2025 cancelling its GST registration. The petitioner had alleged violation of principles of natural justice, arguing that the ITC was blocked without notice or a reasoned order under Rule 86A of the CGST Rules, 2017. 

The petitioner further contended that the cancellation of registration, purportedly on grounds of violation of Section 16 of the CGST Act read with Rule 21(e), was arbitrary and infringed its fundamental right to carry on business under Article 19(1)(g) of the Constitution. It argued that the transactions were genuine, with invoices duly reflected in GSTR-3B and GSTR-2A returns, and that it had no knowledge of any irregularities concerning its suppliers at the time of transactions. 

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The Court held that the petitioner had an alternative statutory remedy available under Section 30 of the CGST Act read with Rule 23 of the CGST Rules, which permits filing an application for revocation of cancellation within the prescribed time. In view of this efficacious remedy, the Court declined to exercise its writ jurisdiction under Article 226 of the Constitution. 

The Court observed that the blocking was linked to an investigation involving allegations that the petitioner had availed fraudulent ITC from non-existent firms. The records indicated that ITC amounting to ₹59.65 lakh was allegedly availed from such entities, and proceedings had been initiated requiring reversal along with interest and penalty under Section 74 of the CGST Act. 

The petitioner had admitted that one of its suppliers was later found to be non-functional, which led to the blocking of ITC amounting to approximately ₹10.55 lakh. The Court noted that investigations against recipients of such non-existent firms were ongoing and held that interference at this stage would be premature and could impede the investigative process. 

The Court categorically stated that entertaining the challenge to the ITC blocking would amount to interfering in an ongoing investigation, which is impermissible. The petitioner is at liberty to avail remedies before the appropriate forum in accordance with law.

Case Details

Case Title: Shri Girivar Alloys Private Limited Versus Commissioner Central GST and Central Excise

Citation: JURISHOUR-1009-HC-2026(PAT) 

Case No.: Civil Writ Jurisdiction Case No.842 of 2026

Date:  23-04-2026 

Counsel For  Petitioner:  Sadashiv Tiwari, Advocate

Counsel For Respondent: Sriram Krishna, Sr. St. Counsel

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