Department’s Preemptive Action on Fraudulent ITC Blocked by Delhi HC

DDS Jewels Private Limited Vs State of Maharashtra And Others (Bombay High Court) The dispute before the Bombay High Court centered on the power of the State tax authorities to restrict the use of a taxpayer’s Input Tax Credit (ITC) available in the Electronic Credit Ledger (ECL) under Rule 86-A of the Central/Maharashtra Goods and Services Tax (CGST/MGST) Rules, 2017. DDS Jewels Private Limited (the Petitioner) challenged two orders dated July 2, 2025, which imposed restrictions on the use of their ITC, alleging that it was fraudulently availed. The core legal challenge was not against ...