Jupiter Ventures v. Assistant Commissioner of Central Tax,

e -e1e-eeeee e e NC:(2026:KHC:11635 WP(No.(3353(of(2026 IN(THE(HIGH(COURT(OF(KARNATAKA(AT(BENGALURU( THDATED(THIS(THE(25 (DAY(OF(FEBRUARY,(2026( BEFORE( THE(HON'BLE(MR.(JUSTICE(S(SUNIL(DUTT(YADAV( WRIT(PETITION(NO.(3353(OF(2026((T-RES) BETWEEN:( JUPITER,VENTURES,, GROUND,FLOOR,,NO.2,, NAGONDANAHALLI,MAIN,ROAD,,, WHITEFIELD,,BENGALURU,-,560,066,, PREVIOUSLY,AT, D,1403,,SHRI,RAMA,PROPERTIES,,, R.T.,NAGAR,,DINNUR,MAIN,ROAD,,, BANGALORE., REPRESENTED,BY,ITS,PROPRIETOR, SRI.,MOHAN,KUMAR, S/O,MUDALAGIRI,GOWDA,,, AGED,ABOUT,55,YEARS., Digitally …PETITIONER, signedtiby (BY,SRI.,KIRAN,NAIDU,,ADVOCATE,FOR,,VIJAYA0P ,,,,,,SRI.,SHREEHARI.,,ADVOCATE),Location: HIGH COURT0OF KARNATAKA AND:

1., ASSISTANT,COMMISSIONER,OF,CENTRAL,TAX,, BENGALURU,NORTH,DIVISION,,, BENGALURU,, OFFICE,OF,THE,COMMISSIONER,OF,CENTRAL,TAX,, BENGALURU,NORTH,COMMISSIONERATE,,, NO.59,,HMT,BHAVAN,,BELLARY,ROAD,,, BENGALURU,-,560,032., e -e2e-eeeee e e NC:(2026:KHC:11635 WP(No.(3353(of(2026

2., ADDITIONAL,COMMISSIONER,OF,CENTRAL,TAX,, RANGE,-,CED,7,,EAST,DIVISION,7,, BENGALURU,EAST,COMMISSIONERATE,, BENGALURU,, BMTC,BUILDING,,OLD,AIRPORT,ROAD,, DOMLUR,,BENGALURU,-,560,071.,

3., PRINCIPAL,COMMISSIONER,OF,CENTRAL,TAX,, BENGALURU,EAST,COMMISSIONERATE,, BENGALURU,, BMTC,BUILDING,,OLD,AIRPORT,ROAD,, DOMLUR,,BENGALURU,-,560,071.,

4., LOCAL,GOODS,AND,SERVICES,TAX,OFFICER-150,, BENGALURU,,, OFFICE,OF,THE,DGSTO,-,5,, NDTTMC,BMTC,BUILDING,,2 ,FLOOR,, YESHWANTHPURA,,, BANGALORE,-,560,022.,

5., COMMISSIONER,OF,COMMERCIAL,TAXES, TTMC,,VTK,,80,FT,ROAD,, NEAR,KHB,GAMES,VILLAGE,,, KORAMANGALA, BENGALURU,-,560,095., …RESPONDENTS, (BY,SRI.,AKASH,B.SHETTY,,ADVOCATE,FOR,R1,TO,R3;, ,,,,,,SRI.,K.,HEMA,KUMAR,,AGA,FOR,R4,AND,R5), THIS,W.P.,IS,FILED,UNDER,ARTICLES,226,AND,227,OF, THE, CONSTITUTION, OF, INDIA, PRAYING, TO, QUASHING, THE, ACTION, OF, RESPONDENT, NO.1, IN, BLOCKING, THE, PETITIONER'S,ELECTRONIC,CREDIT,LEDGER,UNDER,RULE,86A, OF, THE, CENTRAL, GOODS, AND, SERVICES, TAX, RULES,, 2017,, VIDE, REFERENCE, NO.BL2911240000347, DATED, 21.11.2024, (ANNEXURE-B),AND,ETC., , THIS,PETITION,COMING,ON,FOR,PRELIMINARY,HEARING, 'B',GROUP,,THIS,DAY,,ORDER,WAS,MADE,THEREIN,AS,UNDER:,

CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER Learned counsel for the petitioner seeks for correction of the array of parties. Accepting the oral request, petitioner is permitted to correct the array of respondents number. Sri. Akash B. Shetty, learned counsel accepts notice for respondents No.1 to 3. Sri. K. Hemakumar, learned Additional Government Advocate accepts notice for respondents No.4 and 5.

¶2The petitioner has called in question the validity of action of respondent No.1 in blocking the petitioner's Electronic Credit Ledger by invoking power under Rule 86A of the Central Goods and Services Tax Rules, 2017. Reliance is placed on the printout of the Electronic Credit Ledger at Annexure-B which petitioner submits would indicate the blocking of the credit ledger.

¶3The petitioner has raised various contentions including that prior to exercise of power under Rule 86A,

there ought to have been pre-decisional hearing. It is further submitted that despite the lapse of one year and two months as on the date of filing the petition and despite the automatic cessation of an order blocking the Electronic Credit Ledger, the order has continued and that it ought to have ceased as the same loses force by virtue of stipulation under Rule 86A(3). It is also submitted that the respondent authorities are not permitted to block the Electronic Credit Ledger where there is a nil credit or negative balance.

¶4However, it is noticed that the blocking of Electronic Credit Ledger is purportedly effected on

21.11.2024. The Rule 86A(3) reads as follows: "Rule 86A. Conditions of use of amount available in electronic credit ledger:-

(3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction."

¶5In light of the above, the restriction imposed by blocking the Electronic Credit Ledger ought to cease to have effect after the expiry of period of one year from the date of imposing such restriction. Taking note of the assertion of the petitioner that the act of blocking the credit ledger is subsisting till date, in light of the mandate under Rule 86A(3), it is declared that the blocking of Electronic Credit Ledger ought to have stopped operation as on one year from 21.11.2024 and accordingly, it is declared that the action of continuance of blocking of Electronic Credit Ledger is illegal and blocking is deemed to have ceased to be in operation after a period of 12 months. Accordingly, the respondent authorities to unblock the Electronic Credit Ledger forthwith. Accordingly, petition is disposed of. SD/- (S SUNIL DUTT YADAV) JUDGE MCR