Case Note & Summary
The dispute arose from a writ petition filed by a proprietorship business challenging the blocking of its electronic credit ledger by the Assistant Commissioner of CGST and Central Excise. The petitioner sought a writ of mandamus to lift the blockage, which had been imposed on 04.02.2025, arguing that it was invalid in light of an interim stay order issued on 25.02.2026 regarding recovery measures. The petitioner contended that the blocking order exceeded the scope of Section 79 of the GST Act, asserting that negative blocking was impermissible. The respondent's counsel maintained that the blocking order was valid and that the interim order did not affect it. The court analyzed Section 79, which outlines various recovery methods available to the proper officer, concluding that the blocking of the credit ledger, including negative blocking, was permissible under this section. The court distinguished between the provisional measures under Rule 86A and the broader recovery powers under Section 79. Ultimately, the court dismissed the writ petition without costs, affirming the validity of the blocking order.
Headnote
A) Taxation - Blocking of Electronic Credit Ledger - Validity of Blocking Order - Goods and Services Tax Act, 2017, Section 79 - The court held that the blocking of the electronic credit ledger falls within the scope of recovery measures under Section 79, and the contention that negative blocking is impermissible was not accepted. The court noted that the powers under Section 79 are broader than those under Rule 86A, which is a provisional measure. (Paras 6-7).
Issue of Consideration
Whether the blocking of the electronic credit ledger was valid under Section 79 of the GST enactments.
Final Decision
The court dismissed the writ petition, affirming the validity of the blocking order without costs.
Law Points
- Writ of Mandamus
- GST
- Electronic Credit Ledger
- Section 79
- Rule 86A
- Recovery of Tax
