TaxTMI 
TaxTMI 
2026 (2) TMI 1256
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....t for discharge of their GST liabilities. 2. The learned senior counsel appearing for the petitioner would submit that the petitioner Company has been carrying on business genuinely. While so, all of a sudden, the petitioner's electronic credit ledger was blocked on 26.11.2025, 28.11.2025 and 19.12.2025 under the pretext that the petitioner Company is having transactions with the non-existing dealers. The petitioner made a representation to the respondent on 06.01.2026 requesting to unblock their electronic credit ledger and enable them to utilize the ITC available in their electronic credit ledger to discharge their GST liabilities. However, the representation is yet to be considered. The learned senior counsel, in support of his co....
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....ed in fake invoices case and in this regard, investigation is going on. Under such circumstances, this Court is of the view that with regard to the above issue, the respondent can issue show cause notice, after receipt of the investigation report and take a decision is accordance with law. 6. As far as blocking of the petitioner Company's electronic credit ledger is concerned, the respondent need not issue any notice, but has to record the reason for blocking the electronic credit ledger of the petitioner. In the present case, subsequent to the blocking of the electronic credit ledger, the petitioner has made a representation on 06.01.2026 to substantiate their case. However, the same is yet to be considered. At this juncture, it is ....
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.... 86-A should be held to be unauthorised, illegal and without jurisdiction. Probably, if the respondent is right in saying that prior to the order of not allowing the debit of the credit, the assessee cannot expect a show cause notice to be issued. But nevertheless the power under Rule 86-A has been invoked and reasons have been recorded that needs to be communicated to the assessee so as to enable the assessee to put forth his objections and pray for release of the blocking of the electronic credit ledger. It is no doubt true that there is no such procedure provided for under Rule 86-A. Nevertheless, we are required to read the principles of natural justice into the said Rule. 10. In this regard, we rely on the decision of the Hon&....
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....or the assessee is ineligible on anyone of the grounds set out in the clauses from (a) to (d) of Rule 86-A(1), then, the authority, after recording the reasons may not allow to debit of any amount equivalent to such credit in the electronic credit ledger. But, after doing so, the authority is bound to communicate the reasons, which weighed in his mind to pass such an order and not allow credit of any amount equivalent to such credit in the electronic credit ledger. On receipt of such reasons, the assessee is entitled to put forth his submission/objection requesting for lifting of such order and establishing a case that there has not been any fraudulent availment of credit or the assessee would not fall within anyone of the contingencies men....
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....r and if the concerned authority is satisfied with the explanation may revoke the order passed under Rules 86-A or otherwise pass a speaking order as to why the request made by the appellant cannot be complied with and communicate to the appellant within a period of seven (7) days, thereafter. In such an event, it will be open to the appellant to question the said order in the manner known to law. No costs." 7. After elaborate discussions, in the above Writ Appeal, it was held that while passing orders to block the electronic credit ledger in terms of Rule 86-A of Central Goods and Services Tax Rules, 2017, the respondent should communicate the reasons recorded in writing to the appellant therein and subsequent to the receipt of objectio....