Rule 86A cannot support negative blocking of input tax credit beyond credit actually available in the Electronic Credit Ledger.

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....Rule 86A permits blocking of input tax credit only to the extent credit is actually available in the Electronic Credit Ledger. Where the ledger shows no balance or a negative balance, the provision cannot be used to create or sustain further blocking. Applying that principle, the High Court upheld the blocking only up to the positive balance available in the ledger and quashed the excess negative blocking as without jurisdiction. The Department was left free to pursue the remaining disputed amount through adjudicatory proceedings after issuing a fresh show-cause notice.....