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of <h1>Question whether Electronic Credit Ledger blocks apply to existing and future credits raises major issue; matter referred for larger bench</h1> <h3>Sarvottam Rolling Mills Pvt. Ltd. Versus Joint Commissioner State Tax Corporate and Others</h3> Sarvottam Rolling Mills Pvt. Ltd. Versus Joint Commissioner State Tax Corporate and Others - TMI Primary issue is whether blocking of the Electronic Credit Ledger (ECL) can extend beyond credits then reflected to also cover 'future credits' to the extent of allegedly inadmissible input tax credit. Petitioners contend blocking is provisional and assessment and recovery must follow statutory procedure (notably Section 49, CGST Act, 2017). Division Bench precedent (R.M. Dairy Products LLP; follow-up in M/s Samagrah Metal Trading Co.) held that even future credits 'can also be blocked' where existing ECL balance is insufficient. Contrasting authority (Samay Alloys India Pvt. Ltd.) interprets Rule 86A and holds only the 'amount available in the ECL' at the time of blocking may be put under lien, not future credits. Petitioners further assert that blocking prevents filing returns (system treating negative ECL as tax due), risks registration cancellation under Section 29 and may impinge Article 19(1)(g) rights. Given conflicting authorities and potential widespread impact, matter is referred to a larger Bench for authoritative determination.
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