Answer

1. F

   Facts

   High Courts have held that the officer cannot block more than the balance available in the ledger on the date of blocking. A negative balance from blocking is a strong ground to seek removal.

2. P

   Provisions and law

   • Rule 86A(1), CGST Rules 2017Commissioner or authorised officer, not below Assistant Commissioner, may disallow debit of ITC for recorded reasons where the supplier or recipient is non-existent, goods were not received, tax was not paid or there is no valid document
   • CBIC guidelines on Rule 86A, 2 November 2021Block must rest on material evidence, not suspicion; amount not more than the suspect credit; monetary limits for officer ranks; taxpayer may give evidence for review
3. A

   Analysis

   Rule 86A(1) disallows debit of credit 'available' in the ledger. The Bombay High Court in Hemang Bipin Varaiya (2026) held negative blocking illegal. Example: ledger balance ₹3 lakh on the block date, block of ₹7 lakh, ledger shows minus ₹4 lakh; the extra ₹4 lakh blocks future credit and should be removed. Positions differ between courts, so take advice before litigating.

4. C

   Conclusion

   1. 1Download the ledger as on the block date.
   2. 2Show the balance available and the amount blocked.
   3. 3Ask the officer in writing to remove the excess.
   4. 4If refused, discuss a writ petition with an advocate.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.