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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S.R. KRISHNA KUMAR
Rdtmt Steels (India) Private Limited – Appellant
Versus
Assistant Commissioner Of Commercial Tax (Admin) – Respondent
ORDER :
S.R. KRISHNA KUMAR, J.
In this petition, petitioner seeks for the following reliefs:-
“ a) Issue a Writ of Certiorari, or any other appropriate Writ declaring that the action of Respondent No.1 in blocking the Petitioner’s Electronic Credit Ledger (ECL) under Rule 86A of the Central Goods and Services Tax Rules, 2017, pursuant to the communication dated:19.11.2025 reference No.GEXCOM/AE/INV/ ST/6173/2024-AE/O as reflected in the communication enclosed as Annexure-B is illegal, arbitrary, violative of principle of natural justice and contrary to Rule 86A and consequently quash the said blocking order/communication dated: 19.11.2025.
b) Direct Respondent No.1 to furnish to the petitioner all material, reports, and documents relief upon while taking action to block the petitioner’s Input Tax Credit, and thereafter afford a reasonable opportunity of hearing to the Petitioner before passing any adverse order.
c) Direct Respondent No.1 to immediately restore the blocked Input Tax credit of Rs.12,26,36,340/- in the petitioner’s Electronic Credit Ledger forthwith as enclosed in the Annexure-C.
d) Pass any such further order(s) as this Hon’ble court may deem fit in the interest of justice
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 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....
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 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 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.
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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