M/S Shree Shyam Trading Company vs. Union Of INDIA And Others
Original PDF →Facts
The petitioner, M/s. Shree Shyam Trading Company, filed a writ petition challenging the blocking of its Credit Ledger under Rule 86A of the CGST Rules, 2017. This action was taken by the respondent authorities due to the retrospective cancellation of the GST registrations of the petitioner's suppliers. The suppliers had challenged these cancellation orders before the High Court, and their writ petitions were allowed, with the cancellation orders being set aside. Consequently, the basis for blocking the petitioner's Credit Ledger was removed.
Held
The Court held that the blocking of the petitioner's Credit Ledger under Rule 86A of the CGST Rules, 2017, was a consequential measure stemming from the retrospective cancellation of its suppliers' GST registrations. As these cancellation orders were subsequently set aside by the High Court, the very foundation for the action against the petitioner no longer existed. Therefore, the restriction imposed on the petitioner's Credit Ledger was negated. The Court found that no further cause of action survived for adjudication in the present proceedings, and the grievance raised by the petitioner stood redressed. The ratio decidendi is that a consequential action taken based on an order that is subsequently quashed loses its validity and the original action is rendered unsustainable.
Key Issues
1. Whether the blocking of the petitioner's Credit Ledger under Rule 86A of the CGST Rules, 2017, is sustainable when the retrospective cancellation of the GST registrations of its suppliers, which formed the basis for such blocking, has been set aside by this Court? Petitioner's contention: The petitioner argued that since the orders cancelling its suppliers' GST registrations have been quashed by the High Court, the action of blocking its Credit Ledger, which was a consequential measure, is no longer valid and the grievance is redressed. Revenue's contention: The judgment does not record any specific arguments made by the respondents-revenue in opposition to the petitioner's claim.
Sections Cited
Rule 86A
AI-generated summary — verify with the full judgment below
241-10 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP-17986-2024 (O&M) Date of Decision: 1st September, 2026. M/S. SHREE SHYAM TRADING COMPANY
.…...Petitioner(s) V/s UNION OF INDIA AND OTHERS
......Respondent(s)
CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJESH GAUR
Present Mr. Sudhir Malhotra, Advocate, for the petitioner.
Mr. Sourabh Goel, Senior Standing Counsel, CBIC/UOI, with Ms. Himanshi Gautam, and Ms. Drishti Saraf, Advocates for the respondents-revenue
****
ASHWANI KUMAR MISHRA, A.C.J. (Oral)
The present Writ Petition questions the action of the respondent authorities in blocking the Credit Ledger of the petitioner under Rule 86A of the CGST Rules, 2017, on account of the retrospective cancellation of the GST registrations of the petitioner's suppliers.
It transpires that the orders cancelling the GST registrations of the concerned suppliers were put to challenge by such suppliers before this Hon'ble Court. The said Writ Petitions have since been allowed, and the impugned cancellation orders have been set aside.
In such view of the matter, the very foundation for the impugned action of blocking the petitioner's Credit Ledger no longer survives. Since the restriction imposed upon the petitioner was merely SURESH KUMAR 2026.09.05 16:25 I attest to the accuracy and integrity of this document
CWP-17986-2024 (O&M)
a consequential measure arising from the retrospective cancellation of the suppliers' registrations, and such cancellation has been negated, the grievance raised in the present Writ Petition stands redressed.
Accordingly, no further cause of action survives for adjudication in the present proceedings. The Writ Petition is, therefore, dismissed as having become infructuous.
[ASHWANI KUMAR MISHRA] ACTING CHIEF JUSTICE
[RAJESH GAUR] JUDGE
September 1, 2026 Ess Kay
Whether speaking / reasoned :
Yes / No Whether Reportable
:
Yes / No SURESH KUMAR 2026.09.05 16:25 I attest to the accuracy and integrity of this document
Reproduced from the public record of the Punjab and Haryana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.