The Hon’ble Supreme Court in the case of Deputy Director, Directorate General Of GST Intelligence, DZU & Ors v. Kings Security Guard Services Private Limited [Special Leave Petition (Civil) Diary No. 014493/2025, dated May 16, 2025] held that no interference was warranted vide exercise of jurisdiction under Article 136 of the Constitution of India and dismissed the SLP challenging the Delhi HC’s ruling against negative blocking of Electronic Credit Ledger in Kings Security Guard Services Private Limited v. Deputy Director, Directorate General of GST Intelligence [W.P. (C) 16725/2024, dated December 04, 2024].
Facts:
The Directorate General of GST Intelligence (“the Petitioner“) had approached the Hon’ble Supreme Court against the judgment of the Hon’ble Delhi High Court, which had quashed the blocking of the Electronic Credit Ledger (“ECL“) of Kings Security Guard Services Private Limited (“the Respondent“). The Petitioner had invoked Rule 86A of the Central Goods and Service Tax Rules, 2017 (“the CGST Rules”) to block the ECL despite there being a negative balance in the said ledger. The Delhi High Court, relying on its earlier decision in Best Crop Science Pvt. Ltd. v. Principal Commissioner, CGST Commissionerate, Meerut & Ors [2024 SCC OnLine Del 6714], held such negative blocking as impermissible and quashed the same. Aggrieved, the Petitioner filed the present Special Leave Petition before the Supreme Court.
Issue:
Whether the negative balance of an ECL can be subjected to blocking under Rule 86A of the CGST Rules, 2017?
Held:
The Hon’ble Supreme Court in Special Leave Petition (Civil) Diary No. 17900/2025, held as under:
- Observed that, no case for interference was made out under Article 136 of the Constitution of India and dismissed the Special Leave Petition.
- Noted that, other remedies available to the Petitioner for recovery in accordance with law were kept open.
CLICK HERE FOR OFFICIAL JUDGMENT COPY
(Author can be reached at info@a2ztaxcorp.com)
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.
