M/S. Krc Group vs. The Deputy Commissioner Of Commercial Taxes
Held
The Court held that blocking the electronic credit ledger without providing a pre-decisional hearing and without independent reasons to believe, relying instead on borrowed satisfaction, is illegal. The impugned order was quashed.
Facts
The petitioner's electronic credit ledger was blocked by an order dated 11.09.2025, invoking Rule 86A of the CGST Rules, 2017. The petitioner contended that no pre-decisional hearing was provided and the order lacked independent reasons to believe.
Key Issues
Whether blocking of the electronic credit ledger under Rule 86A is valid without a pre-decisional hearing and independent reasons to believe.
Sections Cited
Rule 86A
AI-generated summary — verify with the full judgment below
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HC-KAR NC: 2025:KHC:54643 WP No. 38307 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 38307 OF 2025 (T-RES) BETWEEN:
M/S. KRC GROUP HAVING ITS REGISTERED OFFICE AT NO. 134/135, GANDHI TOWER, FIRST FLOOR, RAMAVILAS ROAD, DEVARAJA MOHALLA, MYSURU, KARNATAKA – 570 024 REPRESENTED BY ITS PROPRIETOR SHRI. R. CHELUVARAJU AGED ABOUT 41 YEARS, S/O LATE RANGASWAMY, RESIDING AT BANNUR HOBLI, T. NARASIPURA TALUK, KUNTHANAHALLI, MYSURU, KARNATAKA – 571 101. …PETITIONER (BY SMT. LAKSHMI MENON, ADVOCATE)
AND:
THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT) -1, MYSURU ZONE, BIDARAM KRISHNAPPA ROAD, DEVARAJA MOHALLA, MYSURU, KARNATAKA – 570 004
THE SUPERINTENDENT OF CENTRAL TAX (HPU) MYSURU CENTRAL GST COMMISSIONERATE, VINAYAMARGA, SIDDHARTHA NAGAR, MYSURU, KARNATAKA – 570 011. 3. THE ASSISTANT COMMISSIONER OF CENTRAL TAX LAKSHMIPURAM DIVISION, S1 AND S2, VINAYA MARGA, SIDDHARTHA NAGAR, MYSURU, KARNATAKA – 570 011 …RESPONDENTS (BY SRI. JEEVAN NEERALGI, ADVOCATE)
The judgment continues below.
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