New Vasan Electric Co vs. Union Of INDIA And Others
Held
The Court held that blocking of ITC in the ECL to create a negative balance is impermissible under Rule 86A of the CGST Rules. The power under Rule 86A can only be exercised if there is available credit in the ECL at the time of blocking.
Facts
The petitioner's Electronic Credit Ledger (ECL) had its Input Tax Credit (ITC) blocked to a negative balance on multiple dates. This action was taken by the respondents without prior intimation or notice, allegedly violating principles of natural justice and the CGST/PGST Act and Rules.
Key Issues
Whether Rule 86A permits blocking of ECL to create a negative balance, and if the power can be exercised without available credit in the ledger.
Sections Cited
Rule 86A, Section 73, Section 74, Section 29, Section 83
AI-generated summary — verify with the full judgment below
1
CWP-25833-2025
278-a IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-25833-2025
Date of Decision: November 19, 2025
M/S NEW VASAN ELECTRIC COMPANY
.....Petitioner
Versus
UNION OF INDIA AND OTHERS
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MR. JUSTICE PARMOD GOYAL
Present: Mr. Sandeep Goyal, Senior Advocate with Mr. Rishab Singla, Advocate for the petitioner.
Ms. Pridhi Sandhu, 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 entries dated 06.01.2025, 18.02.2025, 24.04.2025 and 09.05.2025 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 2025.11.29 15:42 I attest to the accur
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