Shaurya Alloys PVT LTD vs. State Of Punjab And Another
Held
The Court held that Rule 86A does not permit blocking of Input Tax Credit (ITC) in excess of the credit available in the ECL at the time of blocking. 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, creating a negative balance. This action was taken without prior intimation and allegedly in violation of principles of natural justice and Rule 86A of the GST Acts.
Key Issues
Whether Rule 86A of the GST Rules allows blocking of an ECL with a negative balance, exceeding the available credit, and if such action violates statutory provisions and principles of natural justice.
Sections Cited
Rule 86A, Section 73, Section 83
AI-generated summary — verify with the full judgment below
1
CWP-20848-2025
278-b IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-20848-2025
Date of Decision: November 19, 2025
SHAURYA ALLOYS PVT. LTD.
.....Petitioner
Versus
STATE OF PUNJAB 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. 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 of blocking Electronic Credit Ledger (ECL) of petitioner and for deleting entry dated 15.01.2025 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
2
CWP-20848-2025
Learned counsel for parties are ad idem th
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Punjab and Haryana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.