Case : K-9 Enterprises vs. State of Karnataka [TS-573-HC(KAR)-2024-GST]

In the favourable ruling of K-9 Enterprises vs. State of Karnataka [TS-573-HC(KAR)-2024-GST], on the GST Department’s power to blocking of Electronic Credit Ledger (ECL) under Rule 86A of the CGST Rules, the Division Bench of the Hon’ble Karnataka High Court held that the same requires “reasons to believe” and strict compliance with the provision. The Hon’ble Court emphasized that pre-decisional hearings are mandatory for blocking the ECL and the ITC cannot be blocked solely based on communications from other officers.