2026-VIL-1071-MAD
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SGST High Court Cases

GST - Permissibility of blocking and negative blocking of electronic credit ledger under Section 79 of CGST Act – Validity of blocking in light of interim order keeping recovery proceedings in abeyance - Petitioner's electronic credit ledger was blocked on 04.02.2025 - Subsequently, petitioner filed writ petition challenging clubbed assessment order and interim stay was granted on 25.02.2026 keeping recovery proceedings in abeyance - Petitioner challenged blocking order on ground that it travels beyond scope of Section 79 and that negative blocking is impermissible under Section 79, particularly when compared with provisions of Rule 86A - Whether blocking order including negative blocking of electronic credit ledger is permissible under Section 79 of CGST Act and whether interim order regarding recovery proceedings impacts the blocking order - HELD - The interim order dated 25.02.2026 which directs that recovery proceedings be kept in abeyance has no impact on blocking order issued earlier as such interim order only restricts amounts lying in electronic credit ledger from being debited for purposes of recovering dues - Blocking of credit ledger, including negative blocking, falls within scope of Section 79 which provides multiple modes of recovery - The width of Section 79(1) demonstrates that proper officer is entitled to recover amounts payable to Government by adopting one or more specified modes - Rule 86A is a provisional measure typically undertaken at pre-determination of liability stage whereas powers under Section 79 are wider measures taken at post-determination stage to recover amounts due and payable to Government - Viewed in context that blocking of credit ledger is a recovery mechanism at post-determination stage, contention that negative blocking of electronic credit ledger is impermissible under Section 79 cannot be countenanced - The blocking order is permissible under Section 79 and survives notwithstanding the interim order regarding recovery proceedings - The writ petition is disposed of
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