Iskcon Steel Traders vs. Union Of INDIA
Held
The Court held that Rule 86A of the CGST Rules does not permit blocking an ECL by an amount exceeding the credit available at the time of the order. Creating a negative balance in the ECL 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 intimation or notice, allegedly violating principles of natural justice and Rule 86A of the CGST Act.
Key Issues
Whether Rule 86A of the CGST Rules allows blocking of an ECL with a negative balance, exceeding the available credit. Whether such action violates principles of natural justice.
Sections Cited
Rule 86A, Section 73, Section 83
AI-generated summary — verify with the full judgment below
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CWP-29597-2025
284 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-29597-2025 Date of Decision: November 19, 2025
ISKCON STEEL TRADERS
.....Petitioner
Versus
UNION OF INDIA
..... Respondent
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Deepak Gupta , Advocate for the petitioner.
Mr. Ajay Kalra, Senior Standing counsel for respondent No.
Ms. Ridhi Bansal, Advocate for respondents No. 2 and 3. ****
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 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 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-29597-2025
The judgment continues below.
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