Metal Trade Incorporation v. State Tax Officer
In favour of the assessee
The ruling in brief
Metal Trade Incorporation filed WP No. 35866 of 2023 before the Madras High Court, decided 21 August 2026, challenging prolonged blocking of its electronic credit ledger under Rule 86A of the CGST Rules. Restrictions continued for more than two years despite the rule prescribing a maximum one-year limitation period, after which blocked credit must be unblocked automatically. Internal departmental communications were held incapable of lawfully extending the restriction beyond the statutory period. Justice S. Raveekumar declared the continued blockage invalid and granted relief restoring normal ledger operations essential for return filing and working capital management. Outcome favoured the assessee. Chartered accountants should monitor Rule 86A timelines closely and contest overlong administrative freezes through timely writ or representation. Not legal advice.
For information only — not legal advice. Read the full judgment and applicable law before relying on this summary.
Provisions considered
- CGST Rules R.86A — Conditions of use of electronic credit ledger; blocking of credit.
Source documents
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