2026 (9) TMI 400

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....edger of the petitioner for the financial years 2021-22, 2022-23 and 2023-24 for the tax period 01.02.2026 to 17.06.2026. The petitioner challenges the GST Authority's order dated 15th June, 2026 which blocked an amount of Rs. 4,43,53,116/- in its Electronic Credit Ledger under Rule 86A of the CGST/WBGST Rules, 2017 alleging, inter alia, the supplier to be non-existent. 3. Learned advocate for the petitioner submits that all the purchases made by the petitioner were genuine in nature supported with documents. Thus, the blocking of the Electronic Credit Ledger is arbitrary, illegal and not sustainable in the eye of law and thus the order dated 15th June, 2026 is liable to be set aside. 4. Upon receipt of the order of blocking of the El....

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.....11 As stated supra, principles of natural justice necessarily had to be observed and adhered to by the respondents revenue before passing the impugned orders blocking the ECL of the appellants which would entail and visit them with serious civil consequences; so also, in the absence of extraordinary reasons or exceptional circumstances obtaining from the material available with them which would obviate or dispense with the requirement of pre-decisional hearing, it was also incumbent upon the respondents-revenue to provide/grant a pre-decisional hearing to the appellants before invoking Rule 86A and blocking the ECL of the appellants by passing the impugned orders which are vitiated and failure to appreciate this by the learned Single Judge....

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....ders passed by the respondents-revenue blocking the ECL of the appellants without providing/granting pre-decisional hearing and confirmed by the learned Single Judge deserve to be set aside. 8.13 In view of the aforesaid discussion, we are of the considered opinion that the learned Single Judge clearly fell in error in coming to the conclusion that a pre-decisional hearing was not required to have been provided/granted to the appellants by the respondents-revenue prior to passing the impugned orders blocking the ECL of the appellants and consequently, the said findings recorded by the learned Single Judge deserve to be set aside. Point No.1 is accordingly answered in favour of the Appellant and against the respondents-reve....

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....levant documents for the period in question. However, petitioner remains unrepresented on the date of hearing fixed by the authorities. 10. Learned advocate for the State respondent submits that there is no arbitrariness or illegality in passing the order dated 15th June, 2026 for blocking the Electronic Credit Ledger and the same has been initiated in consonance with the Rule 86A of the CGST/WBGST Rules, 2017. 11. Since GST authorities have reasons to believe that suppliers of petitioners are nonexistent and credit claimed without receipt of goods / services of those suppliers whose registrations have cancelled, to protect the revenue, the GST authorities have blocked the Electronic Credit Ledger of the petitioner. 12. After heari....