159 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: November 17, 2025 MAHALUXMI ENTERPRISES .....Petitioner Versus STATE OF PUNJAB AND ANOTHER ..... Respondents CORAM:- HON'BLE MRS. JUSTICE LISA GILL HON'BLE MR. JUSTICE DEEPAK MANCHANDA Present: Mr. Mukul Singla, Advocate for the petitioner.

Mr. R.S. Pandher, Addl. AG, Punjab.

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LISA GILL, J.

1. It is submitted that prayer in this writ petition is restricted to action of respondents blocking Electronic Credit Ledger (ECL) of petitioner and for deleting entry dated 10.11.2025 through which Input Tax Credit has been blocked in negative by the respondents, statedly in violation of provisions of Rule 86A of Central Goods and Services Tax Act, 2017 and Punjab Goods and Services Tax Act, 2017 and in violation of principles of natural justice.

2. Learned counsel for parties are ad idem that question which arises for consideration in the writ petition is:

“Whether Rule 86-A of Goods and Services Tax Rules, 2017 (for short Rules, 2017) permit the Commissioner or an officer authorized by him to block a tax payer’s ECL by an amount exceeding the credit available at the time of issuance of said order?”

3. Learned counsel for parties agree that in view of said sole question of law being the subject matter of adjudication, it is not necessary to postpone the hearing for filing of formal reply on behalf of respondents.

4. Learned counsel for petitioner submits that petitioner is an active business concern registered under the provisions of Central Goods and Services Tax Act, 2017 (for short – ‘CGST Act’) and Punjab Goods and Services Tax Act, 2017 (for short – ‘PGST Act’). Grievance raised is that on 10.11.2025, respondent No. 2 without any prior intimation, notice and in alleged violation of principles of natural justice besides guidelines issued by Central Board of Indirect Taxes and Customs (CBIC), negatively blocked Input Tax Credit (ITC) in Electronic Credit Ledger (ECL) of petitioner under Rule 86A of Act/Rules, 2017 thus showing negative balance as reflected from copy of ECL entries attached as Annexure P-1. It is argued that the provision does not mandate or authorize blocking of ITC in excess of the ITC already available to the credit of registered dealer in its ECL. It is further submitted that an artificial negative balance is created in the petitioner’s ECL which disables it from utilising the ITC availed by it for payment of its dues leading to a situation where it is only the remaining ITC after adjusting negative balance which would become available to petitioner for discharging its dues. Learned counsel for petitioner further submits that power of competent Officer in terms of Rule 86A of 2017 Rules is confined to the ITC which is available at the relevant time in the tax payers ECL.

5. Learned counsel for petitioner refers to decision of Gujarat High Court in Samay Alloys India Pvt. Ltd. Vs. State of Gujrat, 2022(2) TMI 843 and of Delhi High Court in Best Crop Science Pvt. Ltd. Vs. Principal Commissioner and another, 2024 (9) TMI 1543, Kings Security Guard Services Pvt. Ltd. Vs. Deputy Director, Directorate General of GST Intelligence, 2024(12) TMI 1513 and Karuna Rajendra Ringshia Vs. Commissioner of Central Goods and Service Tax and others, 2024(11) TMI 190. It is submitted that decisions of Delhi High Court in Kings Security and Karuna Rajender Ringshias’ cases (supra), which are based on its earlier judgment in Best Crop Science P. Ltd.’s case (supra) have been upheld with SLP(c) Nos.014493/2025 and 017723/2025 challenging said decisions being dismissed by Hon’ble Supreme Court on 17.05.2025 and 09.07.2025, respectively. Learned counsel further submits that this High Court vide decision dated 04.11.2025 in CWP-23675-2025 and other writ petitions has endorsed the view taken by the Delhi High Court in the cases of Best Crop Science Pvt. Ltd. (supra), Kings Security Guard Services Pvt. Ltd. (supra) and Karuna Rajendra Ringshia (supra). Present writ petiti