Unified electronic credit ledger principle requires full ledger review before rejecting credit booked under the wrong GST head.

Input tax credit in the electronic credit ledger was treated as a unified pool rather than as isolated tax compartments, so credit booked under the wrong GST head could not be rejected as ineligible without examining the overall ledger position and utilisation on merits. On that basis, the assessment order and appellate order were set aside, the consequential demand notice was quashed, and the matter was remanded for fresh consideration within a fixed time.

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Issues: Whether input tax credit claimed under different tax heads during the transition from VAT to GST could be treated as ineligible merely because the credit was booked under the wrong compartment of the electronic credit ledger, and whether the assessment order, appellate order and consequential demand notice were liable to be set aside for reconsideration.

Analysis: The governing principle recognised that the electronic credit ledger operates as a unified pool of funds, divided only into different tax compartments, and that credit availability must be assessed on the basis of the entire ledger rather than a single compartment. In view of that legal position, the assessment and appellate authorities could not proceed on the premise that any availment under the wrong head was per se unlawful without a fresh examination of the manner in which the credit arose and was utilised.

Conclusion: The impugned assessment order and appellate order were set aside, the matter was remanded for fresh consideration within a fixed time, and the consequential demand notice was quashed.

Ratio Decidendi: Input tax credit in the electronic credit ledger is to be treated as a unified resource, and a credit entry booked under the wrong GST head cannot be rejected as ineligible without examining the overall ledger position and utilisation on merits.

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