Zigma Machinery & Equipment Solutions Vs Assistant Commissioner Coimbatore (Madras High Court)
Summary: The Madras High Court considered a writ petition filed by M/s.Zigma Machinery & Equipment Solutions challenging the blocking/freezing of its electronic credit ledger pursuant to reference No. BL3302250000152 dated 04.02.2025. The petitioner sought a direction to the respondent to lift the blockage and permit free utilisation of the Input Tax Credit available in the electronic credit ledger.
An assessment order dated 17.03.2023 had been issued for the assessment period 2017-2020. Primarily challenging the clubbing of assessments relating to multiple assessment periods, the petitioner had filed W.P.No.41890 of 2025. An interim stay concerning recovery measures was granted on 25.02.2026. The electronic credit ledger, however, had already been blocked on 04.02.2025, and that blocking order was challenged in the present writ petition.
The petitioner contended that the blocking could not survive in view of the interim order dated 25.02.2026. It was further argued that the blocking travelled beyond the scope of Section 79 of the CGST Act. Comparing Section 79 with Rule 86A of the CGST Rules, learned counsel contended that negative blocking was impermissible under Section 79.
The Revenue submitted that there was no infirmity in the blocking. It also contended that the interim order dated 25.02.2026 merely directed that recovery proceedings be kept in abeyance and did not affect the earlier blocking order.
