Approved resolution plan bars independent enforcement of unresolved pre-existing claims, leading to unblocking of input tax credit.

Once a resolution plan is approved under the Insolvency and Bankruptcy Code and challenges to the insolvency orders fail, pre-existing claims not admitted in the corporate insolvency resolution process cannot be enforced independently against the corporate debtor. On that basis, the High Court held that the notice blocking input tax credit could not survive, since the State's claim had not been adjudicated or allowed in the resolution process and had attained finality with the failed challenge. The impugned notice was quashed, the respondents were directed to unblock the input tax credit and release the amount admissible in law, while any recovery action otherwise available in law was left open.

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Issues: Whether the impugned notice blocking input tax credit could survive after approval of the resolution plan under the Insolvency and Bankruptcy Code and the final rejection of the State's challenge to the insolvency orders.

Analysis: The resolution plan had been approved under the Insolvency and Bankruptcy Code and the State's claim had not been adjudicated or allowed in the corporate insolvency resolution process. The subsequent challenge mounted by the State against the insolvency orders had also failed. In these circumstances, the State could not continue to block the input tax credit or proceed on the basis of the impugned demand notice, because the claim stood outside the concluded resolution process and had attained finality.

Conclusion: The impugned notice was quashed and the respondents were directed to unblock the input tax credit and release the amount admissible in law; the petition was allowed.

Final Conclusion: Finality of the approved resolution plan and the failure of the State's challenges deprived the respondents of authority to enforce the blocked credit against the petitioner, while preserving any action available in law for recovery of dues, if any.

Ratio Decidendi: Once a resolution plan is approved and challenges to the insolvency orders fail, pre-existing claims not allowed in the corporate insolvency resolution process cannot be enforced independently against the corporate debtor.

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