Lalji Steels vs. Union Of INDIA And Others
Held
The High Court held that blocking Input Tax Credit (ITC) in the Electronic Credit Ledger (ECL) to create a negative balance is impermissible if no credit is available. The court endorsed the view that Rule 86A can only be invoked if credit is available in the ECL.
Facts
The petitioner's Electronic Credit Ledger (ECL) was blocked, resulting in a negative balance, allegedly in violation of Rule 86A of the CGST/PGST Acts and principles of natural justice. The petitioner argued that blocking ITC in excess of available credit is not permitted by the rule.
Key Issues
Whether Rule 86A permits blocking of a taxpayer's Electronic Credit Ledger (ECL) by an amount exceeding the credit available at the time of the order, creating a negative balance.
Sections Cited
Rule 86A, Section 73, Section 74
AI-generated summary — verify with the full judgment below
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CWP-30418-2025
286
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-30418-2025 Date of Decision: November 19, 2025
M/S LALJI STEELS
.....Petitioner
Versus
UNION OF INDIA AND OTHERS
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Peysuh Pruthi, Advocate for the petitioner.
Mr. Prashant Rana, Advocate for respondent No.
Mr. R.S. Pandher, Addl. AG, Punjab.
****
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 01.09.2025 through which Input Tax Credit amounting 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. RITU SHARMA 2025.11.28 12:27 I attest to the accuracy and integrity of this document
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CWP-30418-2025
The judgment continues below.
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