The Court relied on the Supreme Court's ruling in Kings Security Guard Services to hold that the ECL cannot be negatively blocked for alleged wrongful availment of ITC.
The Calcutta High Court has quashed an ex-parte demand order and directed readjudication in the case of M/s Mishka Steels LLP, where the GST authorities had negatively blocked the Electronic Credit Ledger and cancelled the registration after alleging availment of fake ITC from non-existent suppliers. [M/s Mishka Steels LLP & Anr. v. Superintendent of CGST & CX & Ors.]
Relying on the Supreme Court's decision in Kings Security Guard Services Pvt. Ltd. and the Delhi High Court in Best Crop Science Pvt. Ltd., the Court observed that the Electronic Credit Ledger cannot be negatively blocked for wrongful availment of ITC. The adjudicating authority had passed the order ex-parte despite the petitioners having filed a reply to the show cause notice — a finding the Court termed an erroneous finding.
The Court directed the adjudicating authority to reconsider the matter within four weeks, affording a proper opportunity of hearing. Upon being satisfied, the authority was directed to take necessary steps for revocation of the cancelled registration and to unlock the ECL, permitting the petitioners to run their business seamlessly.
2026-juristway.com-3051-HC(Calcutta)-GST
