THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING, THIS DAY, AN ORDER IS MADE AS UNDER:

ORAL ORDER

Sri.M.N.Shankare Gowda., counsel for the petitioner and Smt.Nandini B.Somapur., AGA for the respondent have appeared in person.

2. The petition is listed today for preliminary hearing, with the consent, it is heard finally.

3. The petition is filed seeking following reliefs:

“This Hon’ble High may be pleased to issue a writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the Impugned Order dated 07.03.2026 passed by the Respondent under rule 86A for the Month March 2025 blocking the available Input Tax Credit in the Electronic Ledger (Annexure -K) in the Petitioner’s case.

This Hon’ble High may be pleased to issue a Writ or Writs or Directions in the nature of Writ as this Hon’ble High Court may deem with fit to grant in the facts and circumstances of the Petitioner’s case.”

4. The short facts: It is stated that for March, 2025 as per the GSTR-2B in the case of M/s.Sri.Chinmay Enterprises, the total taxable value of the supply of goods was Rs.40,30,138/-. The corresponding available ITC was Rs.11,28,438/-. The petitioner had availed the ITC at the time of filing the monthly return in GSTR-3B for March 2025. The respondent passed the order on 07.03.2026 under 86A of the KGST Rules, 2017, stating that the supplier was found to be non-existent. Under these circumstances, the writ petition is filed.

5. Counsel for the respective parties presented several contentions. Counsel for the petitioner in presenting his arguments strenuously urged that the impugned order has been issued solely based on reports and information received from the Office of the Joint Commissioner of Commercial Taxes (ADMN), Davanagere and the Assistant Commissioner of Commercial Taxes (EFN)-2 Ballari, without any independent application of mind, scrutiny, or evaluation. And no reasons have been assigned in the order. It is, therefore, contended on behalf of the petitioner that the order is erroneous, arbitrary, and unlawful.

Counsel for the petitioner placed reliance on the following decision.

K-9-ENTERPRISES V/S. STATE OF KARNATAKA AND ANOTHER reported in [2025] 137 GSTR 450 (KARNATAKA).

AGA submits that the supplier was found to be non-existent, and hence the order was passed. Urging other contentions, she has submitted that the petition is devoid of merit and liable to be dismissed.

6. Heard the arguments and perused the papers with care.

7. The simple point that requires consideration is whether the impugned order aligns with Rule 86A.

8. I have carefully perused the impugned order passing directions to block the Input Tax Credit (ITC) under Rule 86A of the CGST/KGST Rules, 2017. The order states that the ITC was blocked due to the supplier being allegedly "non-existent." However, the order is legally unsustainable and does not comply with the strict requirements of the Rule. Rule 86A mandates that the Commissioner or authorized officer must record "reasons to believe" in writing, based on cogent material evidence, as to why the ITC is deemed fraudulent or ineligible, before blocking. In the present case, the order relies solely on a vague intimation from other officers and a conclusion that the supplier is non-existent. No independent investigation report or concrete material evidence was provided to support this finding. The order is mechanical and fails to show any application of mind to the specific transactions in question, assigning no direct reasons for blocking the ITC. Consequently, in the absence of recorded reasons supported by material evidence, the blocking of ITC is arbitrary. Furthermore, as established by the Division Bench in the aforementioned decision, '