ECRL of ITC Blocked without Hearing: Rajasthan HC refuses to Intervene [Read Order]
Blocking the ledger of ITC per se does not amount to recovery, said the court.
![ECRL of ITC Blocked without Hearing: Rajasthan HC refuses to Intervene [Read Order]](https://images.taxscan.in/h-upload/2025/07/30/2071000-input-tax-credit-taxscan.webp "ECRL of ITC Blocked without Hearing: Rajasthan HC refuses to Intervene [Read Order]")
The Rajasthan High Court has refused to intervene directly against the blocking of the electronic credit ledger ( ECRL ) of input tax credit ( ITC ) without prior hearing, but has directed the taxpayer to approach the statutory appellate authority under GST ( Goods and Services Tax ). In this matter, M/s Jai Bajrang Steel challenged the action of the GST department in blocking its...
The Rajasthan High Court has refused to intervene directly against the blocking of the electronic credit ledger ( ECRL ) of input tax credit ( ITC ) without prior hearing, but has directed the taxpayer to approach the statutory appellate authority under GST ( Goods and Services Tax ).
In this matter, M/s Jai Bajrang Steel challenged the action of the GST department in blocking its ITC ledger on the grounds that the blocking was done without giving any opportunity of hearing and even before an appeal could be filed against the original adjudication order.
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The petitioner, Jai Bajrang Steel, argued that the department had acted unilaterally by blocking the ITC ledger.
The Division Bench led by Chief Justice Manindra Mohan Shrivastava and Justice Anand Sharma noted that the petitioner had an effective alternative remedy of filing an appeal under the statutory scheme.
The Court clarified that blocking the ECRL is not, in itself, equivalent to recovery but a step to secure revenue when no stay of demand has been obtained.
It observed that “We find that it is not in dispute that the petitioner has neither discharged tax liability as ordered in the adjudication, nor filed any appeal.”
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“As there is no stay of demand, the authority appears to have presently blocked availment of ITC. In view of the provisions contained in Section 78 of the RGST Act, 2017/the CGST Act, 2017, recovery could not be initiated within a period of three months from the date of service of order of demand. Blocking of ledger of ITC per se does not amount to recovery” said the bench in its judgment.
While disposing of the writ petition, the Court gave the petitioner the liberty to file a proper statutory appeal against the adjudication order and make a detailed representation to the department for unblocking the ITC ledger.
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