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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S.R.KRISHNA KUMAR
Krc Group – Appellant
Versus
Deputy Commissioner Of Commercial Taxes (Enforcement) -1 – Respondent
ORDER :
S.R.KRISHNA KUMAR, J.
In this petition, the petitioner seeks the following reliefs:
“A. Declare that the Impugned blocking of the Petitioner's Electronic Credit Ledger on 11.09.2025 vide Reference No. BL2909250000217, insofar as it purports to restrict the utilization of Input Tax Credit beyond the available credit and creates a negative balance, is ultra vires Rule 86A of the CGST Rules, 2017 (Annexure -A) and (Annexure -Al);
B. Consequently, issue a writ of Mandamus or order or direction in the nature of Mandamus directing the Respondent No.3 to forthwith unblock and restore the Input Tax Credit wrongly debited to the extent of Rs. 13,08,003/- (Rupees Thirteen Lakh Eight Thousand and Three only) in Central tax and Rs. 13,08,003/- (Rupees Thirteen Lakhs Eight Thousand and Three only) in State tax totalling amounting to Rs. 26,16,006/- (Rupees Twenty-Six Lakh Sixteen Thousand and Six only). in the Petitioner's Electronic Credit Ledger and to permit the Petitioner to utilize the same for discharge of its lawful tax liabilities;
C. Consequently, liberty may be reserved to the Petitioner to appropriately agitate all rights and contentions in the event any Show Cause Notice is issue
The court emphasized that blocking an Electronic Credit Ledger under Rule 86A requires independent inquiry and valid reasons to believe that ITC is fraudulently availed, which were not present in thi....
The authorities must provide independent reasons and evidence to block a taxpayer's Electronic Credit Ledger under Rule 86A; reliance on borrowed satisfaction is impermissible.
The court held that blocking a taxpayer's Electronic Credit Ledger requires a valid independent assessment and adherence to natural justice, specifically pre-decisional hearings and recording of reas....
The court emphasized that for blocking an Electronic Credit Ledger under Rule 86A, authorities must base their decision on independent assessment rather than borrowed reasoning, ensuring adherence to....
The invocation of Rule 86A to block an Electronic Credit Ledger requires the authorities to fulfill strict preconditions, including providing valid reasons based on independent inquiry, and cannot re....
The blocking of Electronic Credit Ledger under Rule 86A must be based on independent analysis and cannot rely solely on borrowed satisfaction; pre-decisional hearing is mandatory.
Blocking of Electronic Credit Ledgers requires adherence to procedural fairness and independent justification, as reliance on borrowed satisfaction is impermissible under Rule 86A of the CGST Rules.
The blocking of an electronic credit ledger under Rule 86A of the CGST Rules requires independent reasoning and a proper legal basis; actions taken on borrowed satisfaction without pre-decisional hea....
Blocking of an electronic credit ledger under Rule 86A requires independent verification and justifiable reasons, making pre-decisional hearings essential before such actions.
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