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Judgment Summary
Abhishek Goyal vs Union of India
Punjab & Haryana High Court — GST Rule 86A Case
- Blocking only if balance exists: Rule 86A permits blocking of ITC only when an actual credit balance exists in the Electronic Credit Ledger. Zero-balance accounts cannot be blocked.
- Negative Blocking is illegal: Creating a "negative" balance entry to block a zero-balance account is ultra vires — beyond the authority granted under GST law.
- Proper process is mandatory: If fraudulent ITC credit is suspected, officers must issue notice under Section 73 or 74 and conduct a proper inquiry before recovery. Rule 86A is not a recovery tool.
- Outcome: The court set aside the negative blocking entries and restored the taxpayer's electronic credit ledger to its correct state.