Jaikara Fastners vs. Commissioner, Central Goods And Services Tax And Another
Held
The Court held that Rule 86A of the CGST Rules does not permit blocking of Input Tax Credit (ITC) in excess of the credit available in the Electronic Credit Ledger at the time of the order. Creating a negative balance is considered beyond the scope of the rule.
Facts
The petitioner's Electronic Credit Ledger (ECL) was blocked by the respondents, resulting in a negative balance. This action was taken without prior notice and allegedly in violation of natural justice principles and Rule 86A of the CGST Act.
Key Issues
Whether Rule 86A of the CGST Rules allows blocking of ITC beyond the available credit in the ECL, creating a negative balance. Whether such blocking violates principles of natural justice.
Sections Cited
Rule 86A, Section 73, Section 74
AI-generated summary — verify with the full judgment below
1
CWP-32346-2025
295 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-32346-2025 Date of Decision: November 19, 2025
JAIKARA FASTNERS
.....Petitioner
Versus
COMMISSIONER, CENTRAL GOODS AND SERVICES TAX AND ANOTHER
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Mukul Singla, Advocate for the petitioner.
Mr. Rishabh Kapoor, Advocate for the respondents (through VC).
**** LISA GILL, J.
Learned counsel for petitioner submits that prayer in this writ petition is restricted to action of respondents blocking Electronic Credit Ledger (ECL) of petitioner and for deleting entry dated 02.09.2025 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.
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 atte
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