Rule 86A of the CGST Rules, 2017 — Blocking of ITC –— The petitioner prayed for directing the respondent to  forthwith release the block on electronic credit ledger imposed under Rule 86A of the Rules. The court observed that the balance available in the electronic credit ledger of the writ applicant as on the date of blocking was Rs. 10,68,613/-. The negative balance of Rs. 25,58,831/- has been inserted in the electronic credit ledger. Inserting of negative balance is illegal and without jurisdiction in view of the recent pronouncement of this Court in the case of Samay Alloys India Pvt. Ltd. vs. State of Gujarat decided on 3rd February 2021. Further, no reasons have been assigned by the respondent No.3 for blocking the electronic credit ledger.

Held that:- The Hon’ble High Court directed the Respondents to furnish reasons for invoking Rule 86A. Till such time, the applicant shall retain the balance of Rs. 10,68,613/- in its electronic credit ledger.