Electronic credit ledger blocking lapses after one year absent an extension order under Rule 86A(3)

The blocking of an electronic credit ledger under Rule 86A(3) of the CGST Rules cannot continue beyond one year unless an order extending the blocking is passed. Where no such extension order exists, the blocking loses force automatically on expiry of the prescribed period. On the facts noted, the respondents confirmed that no further extension had been issued, so the blockage could not lawfully subsist beyond one year and was treated as having lapsed.

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Issues: Whether the blocking of the electronic credit ledger could continue beyond one year in the absence of any order extending the blocking under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017.

Analysis: The blocking of the electronic credit ledger was challenged on the ground that the statutory period of validity had expired. The respondents confirmed that no further order extending the blocking had been passed. The Court held that, under Rule 86A(3), the blocking could not survive beyond the prescribed period and that the legal consequence of expiry would follow automatically.

Conclusion: The blocking of the electronic credit ledger had lost its force and could not be continued beyond one year. The issue was decided in favour of the petitioner.

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