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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25-08-2026 CORAM THE HON'BLE MR JUSTICE SENTHILKUMAR RAMAMOORTHY WP No. 32816 of 2026 M/s.Zigma Machinery & Equipment Solutions, (A Proprietorship business represented by Sundar, Prabu N – Proprietor), Site No.223, G.K.S. Avenue I, Vadavalli Perur, Veerakeralam, Coimbatore, Tamil Nadu – 641007.

(GSTIN : 33CGIPS5665K1ZS)

..Petitioner Vs Assistant Commissioner Coimbatore - I Division Office of the Assistant Commissioner of CGST and Central Excise, Coimbatore 1 - Division, 1441, Elgi building, Trichy road, Coimbatore, Tamilnadu - 641018.

..Respondent Prayer: Writ Petition is filed under Article 226 of the Constitution of India praying for issuance of Writ of Mandamus directing the respondent to forthwith lift/remove the blockage/freezing of the petitioner’s electronic credit ledger made vide reference No.BL3302250000152 dated 04.02.2025 and permit the petitioner to freely utilize the ITC available therein.

For Petitioner: Mr. Bhagavath P For Respondent: Mr. Rajendran Raghavan Senior Standing Counsel

ORDER

An assessment order dated 17.03.2023 was issued in respect of assessment period 2017 - 2020. Assailing such assessment order primarily on the ground of clubbing of assessments relating to multiple assessment periods, the petitioner filed W.P.No.41890 of 2025. An interim stay was granted in relation to recovery measures on 25.02.2026. Prior thereto, the petitioner’s electronic credit ledger was blocked on 04.02.2025. Such blocking order is the subject of challenge in this writ petition.

2. The first contention of learned counsel for the petitioner is that the blocking order cannot survive in light of order dated 25.02.2026. The second contention is that such blocking order travels beyond the scope of Section 79 of applicable GST enactments. Comparing and contrasting the language of Rule 86A with Section 79, learned counsel contends that negative blocking is impermissible under Section 79.

3. Mr.Rajendran Raghavan, learned Senior Standing Counsel, accepts notice for the respondent. He submits that there is no infirmity in the blocking. He adds that the interim order of this Court only directs that recovery proceedings be kept in abeyance and that said order does not have any impact on the blocking order.

4. As contended by learned Senior Standing Counsel, interim order dated

25.02.2026 directs the respondent to keep recovery proceedings in abeyance. Therefore, said order has no impact on the blocking order issued earlier. The limited impact of the interim order in the writ petition is that amounts lying in the electronic credit ledger cannot be debited for purposes of recovering the dues.

5. As regards the second contention of learned counsel, it is necessary to set out and examine Section 79. Section 79(1) reads as under:

79. Recovery of tax.—

(1) Where any amount payable by a person to the Government under any of the provisions of this Act or the rules made thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely:––

(a) the proper officer may deduct or may require any other specified officer to deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such other specified officer; (b) the proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the proper officer or such other specified officer;

(c) (i) the proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the Government either forthwith upon the money becoming due or being held, or within the time specified in the notice not being before the money becomes due or is held, so much of the mo