Ms Modi Exepeller Indus vs. Union Of INDIA And Another
Held
The Court held that Rule 86A of the CGST Rules does not permit blocking of ITC in excess of the credit available in the Electronic Credit Ledger. Creating a negative balance is considered beyond the scope of the rule.
Facts
The petitioner's Electronic Credit Ledger (ECL) had its Input Tax Credit (ITC) blocked, resulting in a negative balance. This action was taken by the respondents without prior notice and allegedly in violation of natural justice principles and Rule 86A of the CGST Act.
Key Issues
Whether Rule 86A allows blocking of ITC in excess of the available credit in the ECL, creating a negative balance. Whether such action violates principles of natural justice.
Sections Cited
Rule 86A, Section 73, Section 74
AI-generated summary — verify with the full judgment below
1
CWP-32280-2025
292
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-32280-2025 Date of Decision: November 19, 2025
M/S MODI EXEPELLER INDUS
.....Petitioner
Versus
UNION OF INDIA AND ANOTHER
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Tarang Goyal, Advocate for the petitioner.
Mr. Ajay Kalra, Senior Standing counsel for respondent No.
Mr. Sourabh Goel, Senior Standing counsel for respondent No. 2
****
LISA GILL, J.
It is submitted that prayer in this writ petition is restricted to action of respondents of blocking Electronic Credit Ledger (ECL) of petitioner and for deleting entries dated 01.10.2025 and 03.10.2025 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 in violation of principles of natural justice. RITU SHARMA 2025.11.28 12:27 I attest to the accuracy and integrity of this document
2
CWP-32280-2025
Learned counsel
The judgment continues below.
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