Ms Luxmi Enterprises vs. Union Of INDIA And Another
Held
The Court held that Rule 86A of the GST 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 to a negative balance, allegedly in violation of Rule 86A of the CGST/PGST Acts and principles of natural justice. This action was taken without prior intimation or notice.
Key Issues
Whether Rule 86A allows blocking of an Electronic Credit Ledger to a negative balance, exceeding the available credit. Whether such blocking is permissible without prior notice.
Sections Cited
Rule 86A, Section 73, Section 74, Section 29, Section 83
AI-generated summary — verify with the full judgment below
1
CWP-32274-2025
291
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-32274-2025 Date of Decision: November 19, 2025
M/S LUXMI ENTERPRISES
.....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 the respondents.
**** 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 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 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 att
The judgment continues below.
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