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2022 (4) TMI 187 - HC - GSTSeeking release of block on electronic credit ledger imposed under Rule 86A of the GST Rules - HELD THAT - This writ application directing the respondent No.3 to remove the negative balance of 25, 58, 831/- in the electronic credit ledger so as to enable the writ applicant to file his returns. The negative balance shall be removed within a period of one week from the date of receipt of the writ of this order. It is not in dispute that till this date no reasons have been assigned by the respondent No.3 for blocking the electronic credit ledger. As noted above the balance available in the electronic credit ledger is of 10, 68, 613/- - The respondent No.3 shall furnish reasons for invoking Rule 86A of the Rules 2017 for the purpose of blocking of the electronic credit ledger so that the writ applicant can meet with the same. This writ application stands disposed of.
Issues:
Challenge to block on electronic credit ledger under Rule 86A of GST Rules. Analysis: The petitioner filed a writ application seeking relief from the block imposed on the electronic credit ledger under Rule 86A of the GST Rules. The petitioner also requested the removal of a negative balance of &8377; 25,58,831 inserted in the ledger. The main contention was that the insertion of the negative balance was illegal and without jurisdiction. The petitioner assured participation in adjudication proceedings and payment of any ultimately held payable amount. Reference was made to a previous court decision to support the argument against the negative balance insertion. The High Court heard arguments from both parties and noted that the controversy was limited in scope. The balance in the petitioner's electronic credit ledger at the time of blocking was &8377; 10,68,613, with an additional negative balance of &8377; 25,58,831 inserted. The Court agreed with the petitioner's contention that the insertion of the negative balance was illegal and directed the respondent to remove it within one week to allow the petitioner to file returns. Furthermore, the Court highlighted that no reasons had been provided by the respondent for blocking the electronic credit ledger. The respondent was instructed to furnish reasons for invoking Rule 86A of the Rules, 2017, for the block. Until a reasoned order was passed, the petitioner was allowed to retain the balance of &8377; 10,68,613 in the electronic credit ledger. The writ application was disposed of based on these directions, ensuring relief for the petitioner and clarity on the reasons for the block on the ledger.
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