W.P.No.31542 of 2025 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.10.2025 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.No.31542 of 2025 and W.M.P.Nos.35330 & 35331 of 2025 Tvl. Red Rose Garments, Represented by its Proprietor No.271, SNVS Compound, Kongu Main Road, Tiruppur – 641 607. ... Petitioner Vs. 1. Assistant Commissioner (ST) Tiruppur North 1 Assessment Circle Tiruppur – 641 601. 2. Commercial Tax Officer/Assistant Commissioner (ST), Kongunagar Circle, Tirupur-II. ... Respondents Writ Petition is filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorarified Mandamus, calling for the records relating to letter in Roc.304/2025/A1 dated 08.07.2025 along with Roc. GSTIN No.33ANCPP8191N1ZF/2024 dated 01.07.2025 issued by the 1st respondent in 1/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 pursuant to directing the 2nd respondent to block the Electronic Credit Ledger of the petitioner and quash the same and consequently direct the 2nd respondent to unblock/remove the blocking of the Electronic Credit Ledger of the petitioner. For Petitioner : Mr.T.Ramesh For Respondents : Mr.V.Prashanth Kiran Government Advocate ORDER In this Writ Petition, the petitioner has challenged the impugned order dated 01.07.2025 / 08.07.2025 issued by the 1st respondent, directing the 2nd respondent to block the Electronic Credit Ledger of the petitioner. 2. The aforesaid impugned Order dated 01.07.2025 / 08.07.2025 reads as under: “I submit that to Tvl.SRI VISHWESHWARA KNITS (33ANCPP8191N1ZF), Tiruppur Arrear Rs.2,82,41,714/- is a non existent person at the time place verification and effected inward supplies and availed ITC and passed on ITC to same dealers (effected purchase and sales to same dealers). The following tax payers who are active / in active in GST have effected purchases from 2/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 the non existent person and availed Input Tax Crredit as per GSTR-1 filed by Tvl.SRI VISHWESHWARA KNITS (33ANCPP8191N1ZF), Tiruppur as below: Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 1. Vivin Tex 3AALFV0758M1ZP Anuppar palayam June 2019 4,41,224 11,031 11,031 0- 2. PMR Textile 33AASFP7199K1ZB Anuppar palayam June 2019 36,00,000 90,000 90,000 0- Nov- 2019 13,74,288 34,357 34,357 0- 3. Sidharth Apparels 33AYHPP65291122 North-1 March 2020 4,82,62,81 6 12,06,570 12,06,570 0- June 2020 1,49,48,57 5 3,73,714 3,73,714 0- July 2020 1,39,83,72 5 3,49,593 3,49,593 0- Aug 2020 1,33,57,83 0 3,33,946 3,33,946 0- Sep 2020 1,25,81,77 5 3,14,544 3,14,544 0- Oct 2020 1,32,62,17 0 3,31,554 3,31,554 0- Nov 2020 1,16,70,49 5 2,91,762 2,91,762 0- Dec 2020 1,01,08,80 0 2,52,720 2,52,720 0- Jan 2021 89,02,270 2,22,557 2,22,557 0- Feb 2021 2,44,88,91 0 6,12,223 6,12,223 0- Mar 2,06,37,76 5,15,944 5,15,944 0- 3/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 2021 1 4. Sree Sakambhari Industry 33ADIFS0939 H1Z1 Kongu Nagar Sep 2020 61,479 1,537 1,537 0- Oct 2020 61,764 1,544 1,544 0- Nov 2020 63,285 1,582 1,582 0- April 2021 2,19,342 5,484 5,484 0- 5. Muphil Apparel 33BLLPS2245E1Z6 Rural Nov 2020 18,14,140 45,354 45,354 0- Dec 2020 25,27,680 63,192 63,192 0- 6. Jagan Knit Faabs 33AJFPJ2823A1ZY Anuppar palayam Nov 2020 33,482 837 837 0- 7. AisdhaFashions 33BOAPA9666R1ZF Avinashi Jan 2021 17,22,405 43,060 43,060 0 Feb 2021 37,32,430 93,311 93,311 0- Mar 2021 36,97,560 92,439 92,439 0- April 2021 79,92,190 1,99,805 1,99,805 0- July 2021 78,79,950 1,96,999 1,96,999 0- Aug 2021 39,19,760 97,994 97,994 0- Sep 2021 67,63,090 1,69,077 1,69,077 0- Oct 2021 41,45,519 1,03,638 1,03,638 0- Dec 2021 45,57,600 1,13,940 1,13,940 0- 4/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST Jan 2022 17,05,000 42,625 42,625 0- Feb 2022 42,50,335 1,06,260 1,06,260 0- Mar 2022 41,57,050 1,03,926 1,03,926 0- April 2022 75,35,445 1,88,386 1,88,386 0- July 2022 9,90,765 24,769 24,769 0- Aug 2022 20,87,310 52,183 52,183 0- Oct 2022 20,65,440 51,636 51,636 0- March 2024 5,34,870 13,372 13,372 0- April 2024 9,96,000 24,900 24,900 0- May 2024 10,33,670 25,842 25,842 0- June 2024 20,56,446 51,411 51,411 0- July 2024 18,65,810 46,645 46,645 0- Aug 2024 7,59,847 18,996 18,996 0- 8. Sri Balaji Exports 33EURPR6689K1ZF South Jan 2021 18,92,525 47,313 47,313 0- Feb 2021 16,09,485 40,237 40,237 0- April 2021 19,18,625 47,966 47,966 0- July 2021 31,13,375 77,834 77,834 0- 5/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST Augus t 2021 27,90,705 69,768 69,768 0- July 2022 9,07,405 22,685 22,685 0- Aug 2022 5,87,925 14,698 14,698 0- Oct 2022 11,69,755 29,244 29,244 0- Nov 2022 14,46,763 36,169 36,169 0- Dec 2022 14,04,622 35,116 35,116 0- Apr 2023 10,06,630 25,166 25,166 0- May 2023 1,76,840 4,421 4,421 0- June 2023 31,28,392 78,223 78,223 0- July 2023 52,44,213 1,31,105 1,31,105 0- Feb 2024 19,24,863 48,122 48,122 0- 9. Carloo Carments 33CTBPA310911ZY Gandhi nagar Jan 2021 2,02,800 5,070 5,070 0- Oct 2021 19,71,400 49,335 49,335 0- Jan 2022 32,22,700 80,568 80,568 0- Feb 2022 18,13,000 45,325 45,325 0- Mar 2022 29,38,135 73,453 73,453 0- 10. Sakthi Apparels Gandhi Jan 2,38,607 5,965 5,965 0- 6/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 33BMFPC0063D1ZW Nagar 2022 Mar 2022 12,30,015 30,750 30,750 0- Aug 2022 34,73,025 86,826 86,826 0- Oct 2022 20,88,170 52,204 52,204 0- Jan 2022 11,80,000 29,500 29,500 0- Feb 2022 16,87,500 42,188 42,188 0- March 2022 29,94,880 74,872 74,872 0- 11. Bose Experts 33AAHEB8418N1Z6 Gandhi Nagar Mar 2021 2,05,788 5,145 5,145 0- Oct 2021 2,58,700 6,468 6,468 0- 12. 4 Designs 33AZTPV1172C1Z8 Central II March 2021 33,21,390 83,035 83,035 0- 13. SCM Garments Pvt Limited 33AAJCS7850A1Z1 North-1 Mar 2021 26,765 669 669 0- 14. TAS Textiles India Private Limited 33AAFCT3868D1ZD Anuppar palayam Feb 2022 43,460 1,082 1,082 0- Mar 2022 3,24,592 8,115 8,115 0- Apr 2022 1,41,251 3,531 3,531 0- June 2022 3,58,524 8,963 8,963 0- July 2022 6,25,879 15,647 15,647 0- 15 Dollar Industries Kongu Oct 95,256 2,381 2,381 0- 7/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST Limited Nagar 2021 16. Easwar Clothing Company 33AAKFC0436G1ZV South Oct 2021 5,01,970 12,549 12,549 0- 17. RED Rose Garments 33ABWPV1510B1ZU Kongu Nagar May 2022 49,84,974 1,24,624 1,24,624 0- June 2022 45,65,875 1,14,147 1,14,147 0- July 2022 54,07,290 1,35,182 1,35,182 0- Aug 2022 56,75,575 1,41,889 1,41,889 0- Sep 2022 67,45,935 1,68,648 1,68,648 0- Oct 2022 31,71,145 79,279 79,279 0- Nov 2022 35,26,954 88,174 88,174 0- Dec 2022 33,72,890 84,322 84,322 0- Jan 2023 66,35,809 1,65,895 1,65,895 0- Feb 2023 16,57,890 41,447 41,447 0- Mar 2023 1,76,73,40 0 4,41,835 4,41,835 0- May 2023 16,92,570 42,314 42,314 0- July 2023 5,76,220 14,406 14,406 0- Aug 2023 82,64,529 2,06,613 2,06,613 0- Sep 2023 41,40,025 1,03,501 1,03,501 0- 8/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST Oct 2023 69,90,480 1,74,762 1,74,762 0- Nov 2023 35,21,775 88,044 88,044 0- Dec 2023 56,53,926 1,41,348 1,41,348 0- Jan 2024 15,56,800 38,920 38,920 0- Feb 2024 65,32,390 1,63,310 1,63,310 0- Mar 2024 1,79,14,77 9 4,47,870 4,47,870 0- April 2024 44,05,160 1,10,129 1,10,129 0- 18. Wear Me Appaarels 33AQVPK2504N1Z1 North I Sep 2022 24,128 603 603 0- Oct 2022 30,870 772 772 0- 19. FAAther Care Apparels Private Limited North I Nov 2022 15,47,920 38,698 38,698 0- Dec 2022 28,59,340 71,484 71,484 0- 20. GTN Enterprises Ltd 33AACCG3607J1ZV Anuppar palayam Dec 2022 41,727 1,043 1,043 0- 21. Knits Way 33APERG9211L1ZZ Central 1 Mar 2023 47,07,360 1,17,684 1,17,684 0- 22. SSS TEX 22AFDPV7128L1Z2 Bazaar Oct 2023 18,48,200 46,205 46,205 0- 23. Selvam Overseas 33AEUFS0229K1ZP North 2 Dec 2023 1,39,73,55 5 3,49,338 3,49,338 0- Jan 2024 42,31,970 1,05,799 1,05,799 0- 9/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 24. JK Enterprises 33AAKFJ7936J1ZY Kongu Nagar Jan 2024 53,22,360 1,33,059 1,33,059 0- Feb 2024 95,56,040 2,38,901 2,38,901 0- 25 Sri Sathyam Cots Spin 33AEFPV3658A1ZM Palladam -2 Feb 2024 29,87,324 74,683 74,683 0- 26 Baalaji Export Center Aug 2020 2,47,544 6,189 6,189 0- 33ADIPV4072#1Z1 Tiruppur UR III Sep 2020 4,860 122 122 0- 27. V.R.Knitwears LLp 33AAQFV9594Q1ZU Center Tiruppur I Sep 2020 20,451 511 511 0- 28. Mocking Bird International 33ABBFM7182P1ZS Center Tiruppur -IV Feb 2021 2,68,365 6,709 6,709 0- Mar 2021 9,80,226 24,506 24,506 0- Apr 2021 15,64,420 39,111 39,111 0- July 2021 1,54,966 3,874 3,874 0- Oct 2021 7,09,575 17,739 17,739 0- Dec 2021 6,47,031 16,176 16,176 0- Jan 2022 1,13,100 2,827 2,827 0- Feb 2022 80,778 2,019 2,019 0- Mar 2022 1,69,627 4,241 4,241 0- 29. Arrow Exports 33AAKPA2238G1ZT Center Tirupppu r-II July 2021 2,36,296 5,907 5,907 0- 10/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 30 1 Knit Fab 33AACR5967L1ZO Center Tiruppur -III Dec 2021 2,15,260 5,382 5,382 0- Jan 3,22,797 8,070 8,070 0- May 51,811 1,296 1,296 0- 31. Sankavi Red Rose Carments Private Limited Center Tiruppur II May 2022 40,72,000 1,01,925 1,01,925 0- June 2022 65,08,655 1,82,688 1,82,688 0- July 2022 60,56,685 1,68,392 1,68,392 0- Aug 62,00,855 1,55,021 1,55,021 0- Sep 17,15,645 42,891 42,891 0- Oct 31,71,155 79,279 79,279 0- Nov 30,28,185 75,705 75,705 0- Dec 32,85,190 82,130 82,130 0- Jan 31,93,855 79,846 79,846 0- Feb 1,28,93,02 5 3,22,326 3,22,326 0- Apr 33,97,500 84,938 84,938 0- Nov 1,44,10,55 5 3,60,264 3,60,264 0- Dec 63,32,762 1,58,319 1,58,319 0- Jan 41,35,177 1,03,379 1,03,379 0- Mar 7,27,770 18,194 18,194 0- April 8,86,050 22,151 22,151 0- May 19,09,550 47,739 47,739 0- June 6,24,120 15,603 15,603 0- 32. Guga Creation 33AAUFG2275R1ZL Center Tiruppur -Iv June 2022 8,00,600 20,015 20,015 0- 11/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 33 Rainbow Garment Machines 33AATFR9696Q1ZQ Center Tiruppur -II Sep 2022 25,08,790 62,720 62,720 0- 34 SPB Textile 33AUPJ3447R2ZO Center Tiruppur -IV Oct 2022 1,80,837 4,521 4,521 0- Nov 2022 1,08,082 2,702 2,702 0- Dec 2022 1,08,197 2,705 2,705 0- Jan 2023 3,18,925 7,973 7,973 0- 35. King Garments 33BEMPR4845F1Z9 Center Tiruppur -IV May 2023 97,77,865 2,44,447 2,44,447 0- Oct 2023 41,88,455 1,04,711 1,04,711 0- June 2023 14,11,080 35,277 35,277 0- 36. Kay Yes Tex 33AAZFK7431L1ZO Center Tiruppur -II June 2023 10,54,870 26,372 26,372 0- 37. Wish Associates 33AGMPC0015B1ZF Center Tiruppur -II June 2023 21,05,640 52,641 52,641 0- 38. Create Enterprises 33HBRPS8875J1ZG Center Tiruppur -IV June 2023 18,35,140 45,879 45,879 0- Sep 2023 9,49,012 23,725 23,725 0- 39 SRSG Internation 33AOOPG2064G1Z5 Center Tiruppur II Jan 2024 18,79,200 46,980 46,980 0- 40. Sri Mahalakshmi Textiles Center Coimbat Feb 2024 26,88,814 67,220 67,220 0- 12/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl. No. Name & GSTIN (TVL) Circle Mont h & Year Total Taxable Value SG ST CG ST IG ST 33AAIFS7175G1ZZ ore-IVC 41. Swetha Creations 33AODPK7584A1Z5 Center Tiruppur -III Mar 2024 2,14,194 5,355 5,355 0- 42. VHS Garments Private Limited 33AAJCV 7071L1ZV Center Tiruppur -II April 2024 61,19,870 1,52,997 1,52,997 0- May 2024 58,37,153 1,45,929 1,45,929 0- June 2024 69,59,060 1,73,977 1,73,977 0- July 2024 58,53,843 1,46,346 1,46,346 0- Aug 2024 75,96,864 1,89,922 1,89,922 0- Hence the above ITC may be locked and further action may be taken against the above beneficiary. 3. The total amount of credit that is sought to be blocked by the impugned Order is Rs.62,33,318/-, and is based on the ground that petitioner made purchases from various suppliers who did not exist. 4. As on date, the petitioner has also been issued with notices as detailed below: 13/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Sl.No. Assessment Year Intimation Notice DRC 01 A Notice DRC 01 Notice Tax Amount (Rs.) 1. AY 2022-23 28.07.2025 31.07.2025 01.09.2025 31,70,884 2. AY 2023-24 28.07.2025 01.09.2025 28,42,176 3. AY 2024-25 28.07.2025 31.07.2025 01.09.2025 2,20,258 Total 62,33,318/- 5. It is also informed by the learned counsel for the petitioner that petitioner has replied to the notices, and the case is listed for hearing before the respondents on 22.10.2025. 6. Learned counsel for the petitioner would further submit that on the date of blocking, a sum of Rs.14,20,766/- was lying in the petitioner's Electronic Credit Ledger and that still there is a negative blocking for balance sum of Rs.48,93,551/-. 7. Learned Counsel for the petitioner would further submit that in view of the blocking of the Electronic Credit Ledger, the petitioner was unable to discharge the tax liabilities for the period between June to September 2025, and in all, the petitioner has arrears of Rs.23,75,480.00 as detailed below: 14/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 REDROSE GARMENTS TAXABLE CGST SGST TOTAL SALES JUNE 2025 2,16,27,944.00 5,40,698.00 5,40,698.00 10,81,396.00 SALES JULY 2025 1,41,79,825.00 3,54,496.00 3,54,496.00 7,08,992.00 SALES AUG 2025 1,15,96,790.00 2,89,920.00 2,89,920.00 5,79,840.00 SALES SEP 2025 1,05,049.00 2,626.00 2,626.00 5,252.00 TOTAL SALES 4,75,09,608.00 11,87,740.00 11,87,740.00 23,75,480.00 8. Learned counsel for the petitioner would further submit that petitioner has to upload returns for the period between June 2025 to September 2025 and that petitioner continues to be in default, as petitioner was unable to upload the returns in Form GSTR-3B for the above said period. 9. Learned Government Advocate appearing for the respondents would submit that since the petitioner has availed input tax credit on the basis of invoices raised by non existing dealers, petitioner was not entitled to input tax credit, and therefore, there is no merit in the present writ petition. 10. That apart, it is submitted that petitioner has replied to the notice issued in Form GST DRC 01 dated 01.09.2025 for the tax period 2023-2024 15/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 and also the notices issued in Form GST DRC-01A dated 31.07.2025 for the tax period 2022-2023 and 2024-2025 and that petitioner can await for the orders to be passed. 11. It is noticed that the Delhi High Court, in its Order in W.P.(C) 7250/2024 dated 21.10.2024 in the case of KARUNA RAJENDRA RINGSHIA PROPERIETOR R R ENTERPRISES v. COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX & ORS., has held that the respondents are entitled to proceed under Sections 73 and 74 of the respective GST enactment, for determination of the amount due and that Rule 86A(1) of the Rules does not contemplate an order, the effect of which is to require a taxpayer to replenish his Electronic Credit Ledger with valid availment of ITC, to the extent of ITC used in the past. 12. Specifically, a reference was made to the above said decision and the relevant portion is extracted hereunder: “81. As noted above, the revenue authorities are required to proceed under Sections 73 and 74 of the CGST Act for determination of the amount due. After the proceedings under 16/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Chapters XII, XIV and XV of the CGST Act have commenced and the Commissioner is of the opinion that for the purpose of protection of government revenue, it is necessary to do so, he may pass an order under Section 83(1) of the CGST Act, provisionally attaching any property including the bank account of a taxpayer. This is also one of the measures that may be resorted to pending conclusion of the proceedings. 82. Rule 86A(1) of the Rules does not contemplate an order, the effect of which is to require a taxpayer to replenish his ECL with valid availment of ITC, to the extent of ITC used in the past, which the Commissioner or an officer authorized by him has reasons to believe, was fraudulently availed or was ineligible. Such an interpretation would in effect amount to construe an Order under Rule 86A(1) of the Rules as an order for recovery of tax. This is obvious because the taxpayer would now have to incur a larger cash outflow for payment of taxes as he would be denied utilization of validly availed ITC, which he would require to accumulate to compensate for the ITC availed and utilized which the Commissioner or an officer authorized by him, has reasons to believe was fraudulently availed or was ineligible.” 13. It is further submitted by the learned counsel for the petitioner that the aforesaid decision of the Delhi High Court has also been upheld by the 17/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 Hon'ble Supreme Court, by dismissing the department appeal on 09.07.2025 in Special Leave Petition (Civil) Diary No(s). 21136/2025. 14. On the other hand, learned Government Advocate for the respondents would submit that there are no valid grounds to interfere with the impugned order and that there cannot be any negative blocking of the credit. 15. Since the matter would require further consideration, and considering the fact that petitioner is required to discharge tax liabilities to the extent of Rs.23,75,480.00 for the period mentioned above, there shall be a partial stay of the impugned order, limited to 50% of the petitioner's aforesaid tax liability. 16. In other words, the negative blocking shall continue for a sum of Rs.37,05,811/- (48,93,551 – 11,87,740) till the next date of filing of monthly return and payment of tax. The petitioner will be entitled to debit a sum of Rs.11,87,740/- alone from the aforesaid block credit of Rs.48,93,551/-. The petitioner shall replenish the aforesaid block credit of Rs.48,93,551/- before the next due date for payment of tax for the ensuing month. The negative blocking shall continue either an order passed under Rule 86(2) or an order passed under Rule 86A of the respective GST enactments. 18/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 17. Meanwhile, the respondents shall also endeavour to pass such orders as expeditiously as possible, preferably, within a period of 30 days from the date of receipt of a copy of this order both under Rule 86A and under Section 73 / 74 as the case may be. 18. With the above observations, this Writ Petition stands disposed of. Consequently, connected miscellaneous petitions are closed. No costs. 17.10.2025 raja Neutral Citation : Yes / No To 1. The Assistant Commissioner (ST) Tiruppur North 1 Assessment Circle Tiruppur – 641 601. 2. The Commercial Tax Officer / Assistant Commissioner (ST), Kongunagar Circle, Tirupur-II. C.SARAVANAN, J. raja 19/20 https://www.mhc.tn.gov.in/judis W.P.No.31542 of 2025 W.P.No.31542 of 2025 17.10.2025 20/20 https://www.mhc.tn.gov.in/judis