Negative Blocking of ECL Without Available ITC Held Impermissible | HC

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  • Last Updated on 20 December, 2025

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Negative blocking of ECL

Case Details: ISKCON Steel Traders vs. Union of India - [2025] 181 taxmann.com 396 (Punjab & Haryana)

Judiciary and Counsel Details

  • Mrs Lisa Gill & Parmod Goyal, JJ.
  • Deepak Gupta, Adv. for the Petitioner.
  • Ajay Kalra, Sr. Standing Counsel & Ms Ridhi Bansal, Adv. for the Respondent.

Facts of the Case

The petitioner challenged the action of the jurisdictional officer under GST effected negative blocking of input tax credit (ITC) in the Electronic Credit Ledger under Rule 86A of the CGST Rules. The petitioner submitted that Rule 86A does not authorise blocking of ITC exceeding the credit actually available and that negative blocking without available ITC is impermissible. The matter was accordingly placed before the High Court.

High Court Held

The High Court permits withholding only of available ITC in the Electronic Credit Ledger and does not authorise negative blocking in absence of available credit. The Court observed that the provision is designed for emergent situations and can be exercised without prior notice but must be limited to credit actually present in the ledger. The Court further held that the authorities retain the statutory remedies for recovery under Sections 73 and 74 of the CGST Act if any amount is due. The Court directed that negative blocking without available ITC is impermissible.

List of Cases Referred to

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Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied