Negative ITC Blocking Beyond Ledger Balance Invalid Under Rule 86A: Bombay HC

King Enterprises Vs Union of India (Bombay High Court)

The Bombay High Court heard a writ petition challenging a communication/order dated 8 January 2025 issued under Rule 86A of the Central Goods and Services Tax Rules, 2017, by which the authorities blocked the use of Input Tax Credit (ITC) in the petitioner’s electronic credit ledger to the extent of ₹2.66 crores.

At the outset, the Court noted that as on the date of the impugned communication/order, the actual ITC balance available in the petitioner’s electronic credit ledger was only ₹7,06,770. Despite this, the

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