• twitter-icon
Unlimited Tax Return Filing


Delhi HC Orders Unblocking of GST Credit Ledger After One-Year Lapse, Cites Rule 86A

Delhi HC's Order In Case of Shri Sai Ram Enterprises Vs. PR. ADG, DGGI, Gurugram & Anr

The Delhi High Court ordered the unblocking of an enterprise’s electronic credit ledger after one year since its initial blocking.

In doing so, a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta mentioned Rule 86A of the CGST Rules, 2017, which specifies the conditions of use of the amount available in the electronic credit ledger. It specifies that the taxpayer’s credit ledger cannot be blocked after 1 year.

The Directorate General of GST Intelligence issued a show cause notice to the applicant on suspicion of it being a non-existent firm. Thereafter, refusing the GST input tax credit (ITC) to the tune of Rs 29,13,246, the impugned order was passed.

Applicant, blocking has arrived from the period 1st January, 2024 to 31st November, 2024, but even at present, i.e., as on April 2025, it has not been unblocked.

Under rule 86A the Commissioner or authorised officer holds the grounds to assume that the available credit of input tax in the electronic credit ledger has been bogusly taken or is not eligible, can be for the reasons to be recorded in writing, not permit the debit of an amount equivalent to such credit in electronic credit ledger.

However, sub-section (3) states that the restriction will cease to have effect one year after the restriction is imposed.

The High Court held that, “The blocking of the GST ITC shall be lifted because it has been more than one year.”

It then moved to grant liberty to the revenue to take action against the applicant if the allegation of operating a fake firm is verified.

Case TitleShri Sai Ram Enterprises Vs. PR. ADG, DGGI, Gurugram & Anr
Case No.W.P.(C) 5438/2025
Counsel For AppellantMr. Jitin Singhal, Mr. Pravesh Bahuguna and Ms. Megha Advocates.
Counsel For RespondentMr Harpreet Singh, SSC with Ms Suhani Mathur and Mr. Jai Ahuja, Advocates.
Delhi High CourtRead Order

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
SAGINFOTECH PRODUCTS

Leave a comment

Your email address will not be published. Required fields are marked *

Follow Us on Google News

Google News

Latest Posts

Big Offer on All Software

Powering India’s Taxation Experts with Innovation

Upto 20% Off
Tax, ROC/MCA, XBRL, Payroll, Online GST

Limited Offer, Hurry

Tax Offer 2025

Upto 20% Discount on Tax Software

    Select Product*

    Current GST Due Dates