Karnataka High Court Clarifies Rule 86A Cannot Be Invoked Against Supplier for Alleged Wrongful ITC Availment by Customer
The Karnataka High Court has held that the power under Rule 86A of the CGST/KGST Rules can only be exercised where the assessee has fraudulently availed or is ineligible for Input Tax Credit (ITC), and not where the allegation pertains solely to wrongful availment of ITC by the assessee’s customer. The Court set aside the impugned show-cause notice and ordered restoration of the petitioner’s blocked ITC.
