Negative ITC Blocking Beyond Ledger Balance Not Permitted Under Rule 86A: P&H HC

SPL Motors (P) Ltd. Vs Union of India And Others (Punjab and Haryana High Court) The Punjab and Haryana High Court examined the legality of blocking a taxpayer’s Electronic Credit Ledger (ECL) by creating a negative balance under Rule 86A of the Central Goods and Services Tax Rules, 2017. The writ petition was confined to challenging the action of the tax authorities in blocking Input Tax Credit (ITC) through an entry dated 29.04.2024, which resulted in a negative ITC balance, allegedly in violation of Rule 86A and principles of natural justice. Both parties agreed that the sole question for...