Muktai Enterprises Vs Superintendent, Central Tax (Anti-Evasion)
Date: October 6, 2025
Subject Matter
Department cannot block ITC acquired after the date of the blockage
Summary
The High Court addressed a writ petition concerning the blocking of the petitioner's Input Tax Credit (ITC) under the GST Act. The court adopted the reasoning from its earlier judgment disposing of similar petitions (Writ Petition Nos. 10928/2025 and 10933/2025).
The court's decision split the total blocked amount into two distinct categories based on when the credit was acquired:
Credit Available at Blockage Date: ITC corresponding to ₹41,87,658/- was "available" in the electronic credit ledger (ECL) on the date the blocking order was issued.
Credit Acquired Thereafter: ITC corresponding to ₹1,43,30,363/- was acquired by the petitioner after the initial blocking order was issued.
The High Court allowed the petition, setting aside the blocking of the future acquired credit while upholding the blocking of the available credit.
Blocking Upheld: The Respondents' action of blocking ITC corresponding to ₹41,87,658/- (the amount available on the date of the blockage) was upheld.
Blocking Set Aside (Future Credit): The blocking of ITC corresponding to ₹1,43,30,363/- (acquired after the date of the blockage) was set aside.
Restoration Directed: The Respondents are directed to restore the ITC equivalent to ₹1,43,30,363/- to the Petitioner's electronic ledger account within 15 days from the uploading of the order.
Remedies Reserved: The order explicitly states that the Respondents are not precluded from resorting to other remedies available to them under the Act and rules for the recovery of the credit/amount in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Mr. Sachin Kumar, appears along with Mr. Tejas Patil, for the Petitioner.
2. At our request, Mr. J. B. Mishra, who usually appears on behalf of the Respondents, has agreed to appear in this matter as well.
3. This morning, we disposed of Writ Petition Nos. 10928 of 2025 and 10933 of 2025, which involved the same issue as that involved in this Petition.
4. Therefore, by adopting the reasoning in our judgment disposing of Writ Petition Nos. 10928 of 2025 and 10933 of 2025, we dispose of this Petition by upholding the Respondents’ action of blocking Input Tax Credit (ITC) corresponding to Rs. 41,87,658/-, which was ‘available’ on the date of the blockage, but set aside the blocking of ITC acquired thereafter by the Petitioner, corresponding to Rs. 1,43,30,363/-.
5. Further, we direct the Respondents to restore the ITC equivalent to Rs. 1,43,30,363/- to the Petitioner’s electronic ledger account within 15 days from the uploading of this order.
6. Nothing in this order will preclude the Respondents from resorting to the various remedies available to them under the Act and the rules for recovery of the credit/amount in accordance with law.
7. This Petition is allowed in the above terms without any costs order.
8. All concerned to act on an authenticated copy of this order.