2025 (5) TMI 769 - HC - GST

Blocking of ITC in the electronic credit registe - Challenge to action of the respondents in passing the order u/s 86A of the Central Goods and Services Tax Act 2017 - HELD THAT - In the circumstances of the case wherein the plea raised by the petitioner essentially pertains to the debit entry having been made by the respondents qua a sum of Rs. 46, 01, 645/- which aspect has been clarified and indicated as having been blocked only the apprehension as expressed by the petitioner and the foundation for filing the petition is taken care of. Petition disposed off.

Summary

The Allahabad High Court, before Chief Justice Arun Bhansali and Justice Kshitij Shailendra, disposed of a petition challenging the respondents' order dated 24.01.2025 under Section 86A of the Central Goods and Services Tax Act, 2017. The petitioner contended that although the order indicated blocking of Rs. 4,53,79,497/- in the electronic credit register, the respondents had debited Rs. 46,01,645/-, resulting in a negative balance of Rs. 4,07,77,852/-. The Court noted that respondents clarified the amount of Rs. 46,01,645/- was "blocked and not debited," addressing the petitioner's primary grievance.Regarding the legality of creating a negative lien under Rule 86A of the Central Goods and Services Tax Rules, 2017, the Court referenced prior decisions: M/s. R.M. Dairy Products LLP v. State of U.P. (2021 (7) ADJ 449) upheld such action as permissible, while Sarvottam Rolling Mills Pvt. Ltd v. Joint Commissioner (Writ Tax No. 1182 of 2022) referred the issue to a Larger Bench, where it remains pending.Given the clarification that no debit was made, the Court found the petitioner's apprehension unfounded and accordingly disposed of the petition.