Ms Garg Furnace Limited vs. Union Of INDIA And Others
Held
The Court held that blocking Input Tax Credit (ITC) in excess of the available credit in the Electronic Credit Ledger (ECL) is not permissible under Rule 86A. Such orders creating a negative balance are unsustainable and set aside.
Facts
The petitioner's Electronic Credit Ledger (ECL) was blocked, resulting in a negative balance, allegedly in violation of Rule 86A of the CGST Act and principles of natural justice. The petitioner argued that blocking ITC in excess of available credit is impermissible.
Key Issues
Whether Rule 86A permits blocking of ECL by an amount exceeding the credit available at the time of the order. Whether creating a negative balance in ECL by blocking ITC is legally permissible.
Sections Cited
Rule 86A, Section 73, Section 74
AI-generated summary — verify with the full judgment below
1
CWP-31754-2025
288 b IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-31754-2025 Date of Decision: November 19, 2025
M/S GARG FURNACE LIMITED
.....Petitioner
Versus
UNION OF INDIA AND OTHERS
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Anurag Sharma, Advocate for the petitioner.
Mr. Sourabh Goel, Senior Standing counsel for the respondents.
****
LISA GILL, J.
It is submitted that prayer in this writ petition is restricted to action of respondents blocking Electronic Credit Ledger (ECL) of petitioner and for deleting entry dated 01.10.2025 through which Input Tax Credit has been blocked in negative by the respondents, statedly in violation of provisions of Rule 86A of Central Goods and Services Tax Act, 2017 and Punjab Goods and Services Tax Act, 2017 and in violation of principles of natural justice.
Learned counsel for parties are ad idem that question which arises for consideration in the writ petition is: RITU SHARMA 2025.11.28 12:27 I attest to the accuracy and integr
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