TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1125
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.....05.2025 to 31.05.2025, for a total sum of Rs. 3,15,70,792/- in exercise of powers conferred under Rule 86A of the respective Goods and Services Tax Rules, 2017. The details of the aforesaid amount that has been blocked is as under: Description Credit/Debit (Rs.) Integrated Tax Central Tax State Tax Cess Total Blocked 428720 15571036 15571036 0 31570792 3. It is submitted that however, on the date of blocking, the petitioner had a credit balance of only Rs. 19,19,919/-. Thus, there has been a negative blocking for the balance of Rs. 2,96,50,873/- (3,15,70,792- 19,19,919). 4. The petitioner has challenged the impugned blocking of the electronic credit ledger primarily on the ground that it is being done without the authority a....
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.... dated 24.09.2024. 8. It is submitted that the aforesaid order of the Division Bench of the High Court of Delhi has also been affirmed by the Hon'ble Supreme Court in as much as the appeal by the revenue was dismissed holding that no case for interference was made out under Article 136 of the Constitution of India vide order dated 09.05.2025 in Special Leave Petition (Civil) Diary No.21913 of 2025. 9. That apart, the learned counsel for the petitioner submits that this Court by its order dated in W.P.No.1387 of 2024 in the case of Tvl.J.M.Traders rep by its Proprietor Vs The Deputy Commissioner (ST) and others, while noting the requirement of Rule 86A of the Tamil Nadu Goods and Services Tax Rules, 2017 observed that the objective sat....
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....026. 14. The learned Additional Government Pleader for the respondents submits that some of there are contra decisions of the various High Courts including that the decisions have been confirmed by the Hon'ble Supreme Court. Reference is made to the following decisions: (i) The High Court of Allahabad in the case of R.M.Diary Products LLP Vs State of U.P. And others reported in (2021) 55 GSTL 524. A specific reference was made to Paragraph Nos.21 to 26, which reads as under: 21.The operative portion of sub-rule (1) of Rule 86-A limits the exercise of power (by the authorized officer), to the amount that would be sufficient to cover the input tax that, according to the revenue, had either been fraudulently availed or to which the as....
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.... petitioner that there is any violation of the principle when a legislative enactment requires an act to be performed in a particular way it may be done in that manner or not at all. 25.It also stands to reason, if there is no positive credit standing in the electronic credit ledger on the date of the order, passed under Rule 86-A, that order would be read to create a lien upto limit specified in the order passed as per Rule 86-A of the Rules. As and when the credit entries arise, the lien would attach to those credit entries upto the limit set by the order passed under Rule 86A of the Rules. The debit entry recorded in the electronic credit ledger would be read accordingly. 26.Therefore should the assessee earn further credit of 'input....
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....ed credit. Therefore, at no stretch of imagination, one could construed that no blocking orders can be passed at the time of zero balance of ITC in the ECL. Since the negative blocking can continue up to the stage of accumulation of ITC to the extent of wrongful availment of credit in the ECL, the blocking orders can be issued even at the time of zero balance of ITC in the ECL. 7.21 Therefore, the Hon'ble Division Bench of Gurajat High Court and the Hon'ble Delhi High Court had no occasion to discuss with regard to the later part of the provisions of Rule 86A in the aforesaid case laws, as discussed above. Thus, in the absence of non-consideration of later part of provisions of Rule 86A, and in view of the above discussions, this ....
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....ecision of the Single Judge of this Court in the case of Tvl.Skanthaguru Innovations Private Limited stated supra, a similar view has been taken against the assesses. 17. I am inclined to follow the view of this Court rendered in the case of Tvl.Skanthaguru Innovations Private Limited stated supra. However, the interest of the petitioner and the revenue has to be balanced as the show cause notice has been issued on 07.07.2025 in DRC 01 issued under Rule 74 of the respective Goods and Services Tax Rules, to which the petitioner has to reply and order has to be passed. 18. Rule 86A(2) contemplates that the Commissioner or the Officer authorised by him under Sub Rule 1, may, upon being satisfied that the condition disallowing the debit of el....