Electronic credit ledger blocking cannot exceed available input tax credit under Rule 86A, which is only preventive and provisional.

Rule 86A of the Punjab GST Rules operates as a preventive and provisional measure and can be invoked only when input tax credit exists in the electronic credit ledger and recorded reasons show fraudulent or ineligible availment. If the credit is no longer available or has already been utilised, the power cannot be used to create a negative balance or debit the ledger beyond the available credit. Availability of credit is a condition precedent to the exercise of the blocking power, and where no such credit remains, the authority must proceed through ordinary statutory recovery mechanisms instead.

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Issues: Whether Rule 86A of the Punjab Goods and Services Tax Rules, 2017 permits the Commissioner or an authorised officer to block a taxpayer's electronic credit ledger by an amount exceeding the credit available at the time of the order.

Analysis: The rule was construed on its plain language as a preventive and provisional measure. Its invocation is conditioned on the existence of input tax credit in the electronic credit ledger and on recorded reasons to believe that such credit has been fraudulently availed or is ineligible. Once credit is not available in the ledger, or has already been utilised, the power under Rule 86A cannot be exercised to create a negative balance or to effect a debit beyond the available credit. The availability of credit is therefore a condition precedent to the exercise of the power, and the authority must resort to the ordinary statutory recovery mechanisms where warranted.

Conclusion: Rule 86A does not authorise negative blocking of the electronic credit ledger beyond the credit available at the relevant time, and the impugned blocking was unsustainable.

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