ITC Blocking Invalid as Negative Blocking is impermissible Under Rule 86A: Bombay HC

Hemang Bipin Varaiya Vs State of Maharashtra & Ors. (Bombay High Court) The Bombay High Court dealt with a writ petition under Article 226 challenging the blocking of Input Tax Credit (ITC) amounting to ₹1.42 crore by the tax authorities. The petitioner sought quashing of the action dated 24 July 2025 and a direction to unblock the ITC, alleging violation of principles of natural justice and non-compliance with Rule 86A of the Central Goods and Services Tax Rules, 2017. A show cause notice was issued on 17 July 2025 asking why the ITC should not be blocked. However, before the petitioner...