Electronic Credit Ledger blocking must comply with Rule 86A rank and delegation requirements; unauthorised action is invalid.

Blocking of an Electronic Credit Ledger under Rule 86A of the CGST Rules was held invalid where the action was taken by an officer below the rank of Assistant Commissioner. The rule permits such blocking only by the Commissioner or by an officer authorised by him, and the authorised officer must satisfy the prescribed rank requirement. A notification issued under the State GST Act did not amount to a valid amendment or delegation under Rule 86A. The blocking action was therefore without authority and was quashed, leaving the assessee entitled to relief.

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Issues: Whether the blocking of the Electronic Credit Ledger by an officer below the rank of Assistant Commissioner was valid under Rule 86A of the Central Goods and Services Tax Rules, 2017.

Analysis: Rule 86A permits blocking of the Electronic Credit Ledger only by the Commissioner or by an officer authorised by him, and such officer must not be below the rank of Assistant Commissioner. The respondent who issued the blocking action was below that rank. The notification relied upon by the State was issued under the State GST Act and did not amount to an amendment or valid delegation under Rule 86A. The blocking action was therefore without authority.

Conclusion: The blocking of the Electronic Credit Ledger was invalid and could not be sustained. The impugned action was quashed and set aside in favour of the assessee.

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