Interior Zone vs. Union Of INDIA And Others
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 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) had its Input Tax Credit (ITC) blocked by the respondents, resulting in a negative balance. This action was taken without prior notice and allegedly in violation of natural justice principles.
Key Issues
Whether Rule 86A of the GST Rules allows blocking of an Electronic Credit Ledger by an amount exceeding the credit available at the time of the order.
Sections Cited
Rule 86A, Section 73, Section 74
AI-generated summary — verify with the full judgment below
1
CWP-31747-2025
288-a IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-31747-2025 Date of Decision: November 19, 2025
INTERIOR ZONE
.....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 entries dated 24.04.2025, 08.05.2025 and 07.10.2025 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
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