The Delhi High Court has held that the credit ledger cannot be blocked beyond the period of one year, as stipulated under Rule 86A of the CGST Rules, 2017.

The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta have observed that the blocking of the Input Tax Credit (ITC) shall be lifted in view of the fact that it has been more than one year. This is however independent of any other action that the adjudicating authority may have taken, in accordance with law, against the Petitioner.

The petitioner, Shri Sai Ram Enterprises challenged the blocking of the Input Tax Credit (ITC) of Rs. 3,91,23,722 by the Deputy Director, Directorate General of GST Intelligence, Gurugram.

The Petitioner contended that the blocking of the ITC took place for the period 1st January, 2024 to 31st November, 2024 but even at present, i.e., as on April, 2025, the same has not been unblocked.

The Petitioner relied upon Rule 86A of the Central Goods and Services Tax Rules, 2017 which lays down the conditions of use of amount available in electronic credit ledger.

The department contended that the blocking may be due to the allegation of the Petitioner being a non-existing firm. However, he concedes to the fact that there can be no doubt that the blocking is for a period of one year.

The court while disposing of the petition lifted the blocking of the ITC.

Case Details

Case Title: Shri Sai Ram Enterprieses Versus Pr. Adg, Dggi, Gurugram & Anr.

Case No.: W.P.(C) 5438/2025 and CM APPL No. 24762/2025 & 24763/2025

Date: 23/04/2025

Counsel For Petitioner: Jitin Singhal

Counsel For Respondent: Harpreet Singh

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