Judicial Corner: Re-blocking of ECL within one year in a Section 74 proceeding valid; writ dismissed for suppression (16.03.2026)

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Re-blocking of ECL within one year in a Section 74 proceeding valid; writ dismissed for suppression { Creative Enterprises vs. State of Telangana [2026] 184 taxmann.com 183 (Telangana)}

 

Facts

  • The GST department blocked the petitioner’s Electronic Credit Ledger under Rule 86A of the CGST Rules.
  • After the expiry of one year, the department re-blocked the ECL based on proceedings initiated under Section 74 of the CGST Act (fraud/suppression cases).
  • The petitioner filed a writ petition before the High Court, challenging the re-blocking as illegal, claiming the one-year limit under Rule 86A had expired.
  • However, the petitioner did not disclose the ongoing Section 74 proceedings related to the same issue.

 

Issue

Whether re-blocking of the Electronic Credit Ledger within one year in connection with Section 74 proceedings is valid and whether non-disclosure of material facts in the writ petition affects maintainability.

 

 

Held

 

The Telangana High Court held that:

  • The re-blocking of the Electronic Credit Ledger was within the permissible one-year period, considering the Section 74 proceedings.
  • The petitioner suppressed material facts by not disclosing the ongoing proceedings.
  • Such non-disclosure is fatal to a writ petition and therefore the court refused to interfere.
  • Accordingly, the writ petition was dismissed.