M/S Mahendra Enterprises vs. State Of U.P And Another
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HIGH COURT OF JUDICATURE AT ALLAHABAD WRIT TAX No. - 2809 of 2025 Court No. - 3 HON'BLE SHEKHAR B. SARAF, J. HON'BLE PRAVEEN KUMAR GIRI, J.
Heard learned counsel appearing on behalf of the parties.
This is a writ petition under Article 226 of the Constitution of India, wherein the writ petitioner has made the following prayers: "I. Issue a suitable writ, order or direction in the nature of mandamus directing the respondent authorities to unblock the electronic credit ledger of the petitioner. II. Issue a writ, order or direction in the nature of certiorari for setting aside the negative blocking of electronic credit ledger of the petitioner. III. Issue a writ, order or direction in the nature of mandamus directing the respondent authorities not to take coercive measures against the petitioner."
Mr. Aditya Pandey, learned counsel appearing on behalf of the petitioner submits that the negative blocking done by the Deputy Commissioner is illegal in law as he has gone beyond his pecuniary juri iction of blocking electronic credit ledger that is restricted to a sum of Rs. 1 Crore. He relies on the guidelines for disallowing debit of electronic credit ledger under Rule 86A of the U.P.G.S.T Rules 2017 issued on 23.11.2021, wherein Clause 3.2.1 is relevant. The same is delineated below: "3.2.1 The Commissioner is the proper officer for the purpose of exercising powers for disallowing the debit of amount from electronic credit ledger of a registered person under rule 86A. However, Commissioner can also authorize any officer subordinate to him, not below the rank of Assistant Commissioner, to be the proper officer for exercising such power under rule 86A. In exercise Versus Counsel for Petitioner(s) : Aditya Pandey Counsel for Respondent(s) : C.S.C. M/S Mahendra Enterprises .....Petitioner(s) State Of U.P And Another .....Respondent(s)
of powers conferred by Rule 86A: the officers authorised by the Commissioner on the basis of monetary limits are as mentioned below: Total amount of ineligible or fraudulently availed input tax credit Officer to disallow debit of amount from electronic credit ledger under rule 86A Not exceeding Rupees 1 Crore Deputy Commissioner/Assistant Commissioner as per their juri iction; Above Rupees 1 crore but not exceeding Rs 5 crore
Joint Commissioner (Executive)/Joint Commissioner (Corporate circle) as per their Juri iction; Above Rs 5 crore Additional Commissioner Grade l "
In light of the above, it is clear that the Deputy Commissioner can only block the electronic credit ledger for a sum of Rs. 1 Crore and not above the same.
In the present case, the petitioner submits that the electronic credit ledger of the petitioner has been dropped for a sum of Rs. 5,09,48,306/-.
Accordingly, the order passed for blocking the electronic credit ledger is quashed and set aside inasmuch as it exceeds the sum of Rs. 1 Crore. We make it clear that a sum of Rs. 1 crore shall remain blocked whereas the balance in the electronic credit ledger may be used by the petitioner in accordance with law.
The petitioner may also make an application under Rule 86A for unblocking of the electronic credit ledger in accordance with law.
If such an application is made then the Officer concerned shall pass a reasoned order in accordance with law.
With the above directions, the writ petition is disposed of. September 12, 2025 K.Tiwari WTAX No. 2809 of 2025 2 (Praveen Kumar Giri,J.) (Shekhar B. Saraf,J.) KRISHNA KANT TIWARI High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.