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TMI Blog2024 (10) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... natural justice can be read into statutory provisions though they are not expressly present in the provisions - though Rule 86A does not expressly/specifically provide for adherence to principles of natural justice, the same would necessarily have to be read into Rule 86A and complied with while invoking the said provision. It would also be apposite to state that when the ECL of the appellants was sought to be blocked and such credit cannot be utilised for upto 1 year, the said blocking would entail and result in serious civil consequences for the appellants warranting compliance with the principles of natural justice and providing an opportunity of hearing to the appellants. The learned Single Judge clearly fell in error in coming to the conclusion that a pre-decisional hearing was not required to have been provided/granted to the appellants by the respondents-revenue prior to passing the impugned orders blocking the ECL of the appellants and consequently, the said findings recorded by the learned Single Judge deserve to be set aside - the issue is accordingly answered in favour of the Appellant and against the respondents-revenue by holding that respondents-revenue committed a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently, the impugned orders deserve to be quashed - the issue is answered in favour of the appellants by holding that the respondents-revenue committed a grave and serious error/illegality/infirmity in passing the impugned orders blocking the Electronic Credit Ledgers of the Appellants by invoking Rule 86A of the CGST Rules. Whether the impugned order passed by the learned Single Judge warrants interference in the present appeals? - HELD THAT:- It is already concluded that the learned Single Judge committed an error in holding that a pre-decisional hearing was not required prior to passing the impugned orders and that the respondents had satisfied the requirements/ingredients for invocation of Rule 86A and that the said findings recorded by the learned Single Judge deserve to be set aside. Under these circumstances, upon re-appreciation, re-evaluation and re-consideration of the entire material on record, the order of the learned Single Judge is not only contrary to law but also the material on record warranting interference in the present appeals which deserve to be allowed - the issue is answered in favour of the appellants by holding that the order of the learned Single Judge des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and law, in particular, the provisions contained in Rule 86A of the CGST Rules and the principles enunciated in the judgments relied upon by the appellants and consequently, the impugned order deserves to be set aside and the writ petitions filed by the appellants deserve to be allowed. 5. Per contra, learned AAG for the respondents revenue would support the impugned order and submit that there is no merit in the appeals and the same are liable to be dismissed. 6. Learned Senior Counsel and Amicus Curiae took this Court through the various statutory provisions, the judgments of the Apex Court, this Court and other High Courts as well as the Circular No. CBEC-20/16/05/2021-GST/1552 dated 02.11.2021 and submit that in the facts of the instant cases, the respondents revenue were not justified in passing the impugned orders blocking the ECL of the appellants. He would elaborate his submissions as under:- (i) Rule 86A specifies the conditions for use of amount available in the ECL and the said provision was introduced so as to enable the respondents-revenue to block alleged ineligible ITC and control the menace of fake invoices which are alleged to have been fraudulently obtained by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are involved in the exercise of such powers, compliance with the principles of natural justice is a sine qua non and the said rule does not explicitly provide nor prohibit the same. Therefore, there is a need to read into the rules and the necessity to comply with the principles of natural justice. (ix) Rule 86A, which in effect is the power to block electronic credit ledger is drastic in nature. It creates a disability for the taxpayer to avail of the credit in ECL for discharge of his tax liability which he is otherwise entitled to avail. Therefore, all the requirements of Rule 86A would have to be fully complied with before the power thereunder is exercised. When this Rule requires arriving at a subjective satisfaction which is evident from the use of words, must have reasons to believe , the satisfaction must be reached on the basis of some objective material available before the authority. It cannot be made on the flights of ones fancies or whims or caprices. (x) In the instant cases, the electronic credit ledgers have been blocked solely on the basis of communication from another officer [Field visit report by the Asst. State Tax Officer, Vasco-D-Gama, (Goa)]. There was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all is the well-established principle of administrative law. (xiv) In the instant cases, the impugned order discloses that the same has been passed mechanically and is based on borrowed satisfaction and does not meet the test of formation of an opinion of the Assessing Officer who seems to have been influenced by the findings of the Investigation Wing [i.e, Field visit report by the Asst. State Tax Officer, Vasco-D-Gama, (Goa)] and have not independently formed an opinion on the likely additions to be made during assessment proceedings. In the light of existence of a legal mandatory pre-requirement and precondition of recording of formation of opinion which is in pari-materia with reasons to believe , it was incumbent upon the officer to arrive at his own satisfaction and not borrowed satisfaction by proper application of mind and consequently, the impugned orders are bald, vague, cryptic, laconic, unreasoned and non-speaking and have to be set aside. (xv) It is submitted that the Department solely on the basis that the supplier has been found to be non-existent or not to be conducting any business from the place for it has obtained registration, has blocked the input tax which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.com 501 (kar); 21. Bright State Plastic Industries vs Addl. Commr of Sales Tax (Appeal) - 2022(57) GSTL 226 (Ori); 22. Arhaan Ferrous and Non-Ferrous Solutions (P) Ltd, vs Deputy Assistant Commissioner-1 (ST) - 2023(9) Centax 171(AP); 23. State of Maharashtra vs Suresh Trading Company - (1997) 11 SCC 378; 24. On Quest Merchandising India India Pvt.Ltd, vs. Government of NCT of Delhi - (2018) 10 GSTL 182(Del); 25. Sanchita Kundu vs. Asst. Commissioner of State- Tax 2022(63) GSTL 413 (Cal) (para 6-8); 26. LGW Industries Ltd vs Union of India in [WPA No.23512/2019(Cal)] 27. Vodafone International Holdings BV vs Union of India - (2012) 6 SCC 613; 28. Commissioner of Central Excise Vs. Kay Kay Industries - (2013) 295 ELT 177; 29. M/s.DY Beathel Enterprises Vs state Tax Officer - 2022(58) GSTL 269 (Mad); 30. Suncraft Energy Pvt Ltd vs.AC - State Tax 2023(9) Centax 48 (Cal); 31. Statement of objects and reasons appended to Constitution (122nd Amendment) Bill, 2016; 32. Statement of Objects and Reasons appended to the Bill introducing the CGST Act; 33. Collector of Central Excise vs. Dai Inchi Karkaria Ltd -1999(112) ELT 353 (SC); 34. Eicher Motors vs Union of India - 1999 (106) ELT 3 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This happens only on receipt of the CIN. 11. Both the CGST and SGST are paid in equal proportions for the intra-State supplies. The IGST is paid for the inter-State supplies. The taxpayer's monthly GST return reflects the amount of tax to be paid as well as the input-tax credit (ITC) details. These ITC details are self-assessed by the taxpayer via the monthly returns. Furthermore, these details get reflected in the electronic credit ledger. And the amount of ITC in the electronic credit ledger gets utilized as per the rules mentioned in section 49. ITC utilization 12. The ITC is utilized in the following sequence to set off the CGST liability: (1) The ITC standing under the CGST is used to set off the CGST output liability. (2) Then, the ITC standing under the IGST is used to set off the remaining CGST output liability. 13. Further, the ITC is utilized in the following sequence to set off the SGST liability : (1) The ITC standing under the SGST is used to set off the SGST output liability. (2) Then, the ITC standing under the IGST is used to set off the remaining SGST output liability. 14. Finally, the ITC is utilized in the following sequence to set off the IGST liability : (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any un-utilised amount. (2) The Commissioner, or the officer authorised by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction. 8.2 A plain reading of Rule 86A will indicate that the said provision contemplates that the power to block the input tax credit ledger is to be taken by the Commissioner or an officer not below the rank of the Assistant Commissioner showing the importance of the said provision; this power can be exercised only when the officer specified above has reasons to believe that there are two broad instances that are available viz., firstly, where credit has been fraudulently availed and seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be drawn. Moreover, in a given transaction of an agreement to sell, there might be several bona fide considerations which might induce a seller to sell his immovable property at less than what might be considered to be the fair market value. For example : he might be in immediate need of money and unable to wait till a buyer is found who is willing to pay the fair market value for the property. There might be some dispute as to the title of the immovable property as a result of which it might have to be sold at a price lower than the fair market value or a subsisting lease in favour of the intending purchaser. There might similarly be other genuine reasons which might have led the seller to agree to sell the property to a particular purchaser at less than the market value even in cases where the purchaser might not be his relative. Unless an intending purchaser or intending seller is given an opportunity to show cause against the proposed order for compulsory purchase, he would not be in a position to rebut the presumption of tax evasion and to give an interpretation to the provisions which would lead to such a result would be utterly unwarranted. The very fact that an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strate that the reasons which persuaded the authority to pass an order adverse to his interest were erroneous, irrational or irrelevant, and (2) that the obligation to record reasons and convey the same to the party concerned operates as a deterrent against possible arbitrary action by the quasi-judicial or the executive authority invested with judicial powers. 30. Section 269UD(1), in express terminology, provides that the appropriate authority may make an order for the purchase of the property for reasons to be recorded in Writing . Section 269UD (2) casts an obligation on the authority that it shall cause a copy of its order under sub-section (1) in respect of any immovable property to be served on the transferor . It is, therefore, inconceivable that the order which is required to be served by the appropriate authority under sub-section (2) would be one which does not contain the reasons for the passing of the order or is not accompanied by the reasons recorded in writing. It may be permissible to record the reasons separately but the order would be an incomplete order unless either the reasons are incorporated therein or are served separately along with the order on the affect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. 13. Initially, it was the general view that the rules of natural justice would apply only to judicial or quasi-judicial proceedings and not to an administrative action. However, in State of Orissa v. Dr. Miss Binapani Dei , the distinction between quasi-judicial and administrative decisions was perceptively mitigated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e party affected. The principle will hold good irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi-judicial. 16. We may, however, hasten to add that no general rule of universal application can be laid down as to the applicability of the principle of audi alteram partem, in addition to the language of the provision. Undoubtedly, there can be exceptions to the said doctrine. Therefore, we refrain from giving an exhaustive catalogue of the cases where the said principle should be applied. The question whether the principle has to be applied or not is to be considered bearing in mind the express language and the basic scheme of the provision conferring the power ; the nature of the power conferred and the purpose for which the power is conferred and the final effect of the exercise of that power. It is only upon a consideration of all these matters that the question of application of the said principle can be properly determined. (See : Union of India v. J. N. Sinha) 17. In Mohinder Singh Gill v. Chief Election Commissioner**, explaining as to what is meant by the expression civil consequence , Krishna Iyer J., speaking for the majori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard before such an order could be passed should be given or not. Relying on the decisions of this court in Union of India v. Col. J. N. Sinha and Olga Tellis it was held that : Although Chapter XX-C does not contain any express provision for the affected parties being given an opportunity to be heard before an order for purchase is made under section 269UD, not to read the requirement of such an opportunity would be to give too literal and strict an interpretation to the provisions of Chapter XX-C and in the words of Judge Learned Hand of the United States of America ' to make a fortress out of the dictionary.' Again, there is no express pro vision in Chapter XX-C barring the giving of a show-cause notice or reasonable opportunity to show cause nor is there anything in the language of Chapter XX-C which could lead to such an implication. The observance of principles of natural justice is the pragmatic requirement of fair play in action. In our view, therefore, the require ment of an opportunity to show cause being given before an order for purchase by the Central Government is made by an appropriate authority under section 269UD must be read into the provisions of Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could further show that what the Assessing Officer considers to be complex is, in fact, not so. It was also open to him to show that the same would not be in the interests of the Revenue. 21. In the light of the aforenoted legal position, we are in respectful agreement with the decision of this court in Rajesh Kumar that an order under section 142 (2A) does entail civil consequences. At this juncture, it would be relevant to take note of the insertion of the proviso to section 142 (2D) with effect from June 1, 2007. The proviso provides that the expenses of the auditor appointed in terms of the said provision shall, henceforth, be paid by the Central Government. In view of the said amendment, it can be argued that the main plank of the judgment in Rajesh Kumar to the effect that direction under section 142 (2A) entails civil consequences because the assessee has to pay substantial fee to the special auditor is knocked off. True it is that the payment of auditor' s fee is a major civil consequence, but it cannot be said to be the sole civil or evil consequence flowing from directions under section 142 (2A). We are convinced that special audit has an altogether different connota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be deemed to be judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code, 1860, and also for the purpose of section 196 of the Indian Penal Code and every Income-tax authority is a court for the purpose of section 195 of the Code of Criminal Procedure, 1973. Though having regard to the language of the provision, we have some reservations on the said view expressed in Rajesh Kumar' s case, but having held that when civil consequences ensue, no distinction between quasi-judicial and administrative order survives, we deem it unnecessary to dilate on the scope of section 136 of the Act. It is the civil consequence which obliterates the distinction between quasi-judicial and administrative function. Moreover, with the growth of the administrative law, the old distinction between a judicial act and an administrative act has withered away. Therefore, it hardly needs reiteration that even a purely administrative order which entails civil consequences, must be consistent with the rules of natural justice. As already noted above, the expression civil consequences encompasses infraction of not merely property or personal rights but of civil liberties, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve developed with the growth of civilisation and the content thereof is often considered as a proper measure of the level of civilisation and Rule of Law prevailing in the community. Man within the social frame has struggled for centuries to bring into the community the concept of fairness and it has taken scores of years for the rules of natural justice to conceptually enter into the field of social activities. We do not think in the facts of the case there is any justification to hold that rules of natural justice have been ousted by necessary implication on account of the time frame. On the other hand we are of the view that the time limited by statute provides scope for an opportunity to be extended to the intended excluded employees before the scheme is finalised so that a hearing commensurate to the situation is afforded before a section of the employees is thrown out of employment. 16. We may now point out that the learned Single Judge of the Kerala High Court had proposed a post-amalgamation hearing to meet the situation but that has been vacated by the Division Bench. For the reasons we have indicated, there is no justification to think of a post-decisional heading. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition precedent to action. It is common experience that once a decision has been taken. there is a tendency to uphold it and a representation may not really yield any fruitful purpose. 13. The view that has been taken by this Court in the above observation is that once a decision has been taken, there is a tendency to uphold it and a representation may not yield any fruitful purpose. Thus, even if any hearing was given to the employees of CORIL after the issuance of the impugned circular, that would not be any compliance with the rules of natural justice or avoid the mischief of arbitrariness as contemplated by Article 14 of the Constitution. The High Court in our opinion was perfectly justified in quashing the impugned circular. 8.11 As stated supra, principles of natural justice necessarily had to be observed and adhered to by the respondents-revenue before passing the impugned orders blocking the ECL of the appellants which would entail and visit them with serious civil consequences; so also, in the absence of extraordinary reasons or exceptional circumstances obtaining from the material available with them which would obviate or dispense with the requirement of pre-decisional h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be set aside. Point No.1 is accordingly answered in favour of the Appellant and against the respondents-revenue by holding that respondents-revenue committed a grave and serious error/illegality/infirmity in not providing/granting a pre-decisional hearing to the Appellant before passing the impugned order blocking its Electronic Credit Ledger under Rule 86A of the CGST Rules and consequently, the impugned orders deserve to be set aside. Re: Point No.2 9. The next point that arises for consideration is as to whether the respondents-revenue were justified in passing the impugned orders blocking the Electronic Credit Ledgers of the appellants by invoking Rule 86A of the CGST Rules which mandates that the respondents-revenue should have reasons to believe that the ITC available in the ECL was fraudulently availed or was ineligible as contemplated in the said provision; in this regard, the learned Single Judge noticed that 2 pre-requisites/conditions had to be satisfied/fulfilled before invocation of Rule 86A and blocking the ECL of the appellants and held as under: 18. The first requisite of the Rule which is required to be considered by the competent authority is with regard to the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip to the appellants especially when ITC was a valuable right which cannot be confiscated in a manner opposed to law. 9.3 The learned Single Judge also failed to appreciate that the procedure prescribing the requirements for blocking ECL has been explained by the respondents themselves in the CBEC Circular dated 02.11.2021, the relevant portions are as under: 3.1.2 Perusal of the rule makes it clear that the Commissioner, or an officer authorised by him, not below the rank of Assistant Commissioner, must have reasons to believe that credit of input tax available in the electronic credit ledger is either ineligible or has been fraudulently availed by the registered person, before disallowing the debit of amount from electronic credit ledger of the said registered person under rule 86A. The reasons for such belief must be based only on one or more of the following grounds: a) The credit is availed by the registered person on the invoices or debit notes issued by a supplier, who is found to be non-existent or is found not to be conducting any business from the place declared in registration. b) The credit is availed by the registered person on invoices or debit notes, without actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 86A to disallow debit of the amount from electronic credit ledger of the registered person may be exercised by the Commissioner or the officer authorized by him, as per the monetary limits detailed in Para 3.2.1 above. The officer should apply his mind as to whether there are reasons to believe that the input tax credit availed by the registered person has either been fraudulently availed or is ineligible, as per conditions/ grounds mentioned in sub-rule (1) of rule 86A and whether disallowing such debit of electronic credit ledger of the said person is necessary for restricting him from utilizing/ passing on fraudulently availed or ineligible input tax credit to protect the interests of revenue. Such Reasons to believe shall be duly recorded by the concerned officer in writing on file, before he proceeds to disallow debit of amount from electronic credit ledger of the said person. 9.4 It is clear from the aforesaid CBIC Circular that the respondents-revenue must form an opinion for disallowing debit of an amount from electronic credit ledger in respect of a registered person, only after proper application of mind considering all the facts of the case, including the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thered in relation to fraudulent availment of input tax credit or ineligible input tax credit availed as per the conditions/grounds in Rule 86A. 9.7 A perusal of the impugned orders will indicate that the same have been passed based on the communication received from other officers, without any independent application of mind. This shows that exercise of power under Rule 86A was not because he was independently satisfied about the need for blocking the ECL but, was due to the fact that he felt compelled to obey the command of another officer. This is not the manner in which the law expects the power under rule 86A to be exercised. When a thing is directed to be done in a particular manner, it must be done in that manner or not at all is the well-established principle of administrative law. On a perusal of the impugned orders, it is crystal clear that the order to block the ECL provisionally was out of the borrowed satisfaction of the respondent authorities rather than based on any independent analysis. 9.8 As stated supra, the impugned order discloses that the same has been passed mechanically and is based on borrowed satisfaction and does not meet the test of formation of an opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under sub-section (9), the proper officer after considering the representation of the person chargeable to tax is authorised to determine the amount of tax, interest and penalty due and to issue an order. A period of five years is stipulated by sub-section (10) for the issuance of an order in sub-section (9). Sub-section (11) stipulates that upon service of an order under subsection (9), all proceedings in respect of the notice shall be deemed to be concluded upon the person paying the tax with interest under Section 50 and a penalty equivalent to 50 per cent of the tax within thirty days of the communication of an order. These provisions indicate how sub-sections (5), (8) and (11) operate at different stages of the process. 49. Now in this backdrop, it becomes necessary to emphasise that before the Commissioner can levy a provisional attachment, there must be a formation of the opinion and that it is necessary so to do for the purpose of protecting the interest of the government revenue. The power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account. The attachme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d stand defeated. Necessity in other words postulates a more stringent requirement than a mere expediency. A provisional attachment under Section 83 is contemplated during the pendency of certain proceedings, meaning thereby that a final demand or liability is yet to be crystallised. An anticipatory attachment of this nature must strictly conform to the requirements, both substantive and procedural, embodied in the statute and the rules. The exercise of unguided discretion cannot be permissible because it will leave citizens and their legitimate business activities to the peril of arbitrary power. Each of these ingredients must be strictly applied before a provisional attachment on the property of an assessee can be levied. The Commissioner must be alive to the fact that such provisions are not intended to authorise Commissioners to make pre-emptive strikes on the property of the assessee, merely because property is available for being attached. There must be a valid formation of the opinion that a provisional attachment is necessary for the purpose of protecting the interest of the government revenue. 51. These expressions in regard to both the purpose and necessity of provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the dealer. However, such satisfaction must be on some tangible material on objective facts with the Commissioner. In a given case, on the basis of the past conduct of the dealer and on the basis of some reliable information that the dealer is likely to defeat the claim of the Revenue in case any order is passed against the dealer under the VAT Act and/or the dealer is likely to sale his properties and/or sale and/or dispose of the properties and in case after the conclusion of the assessment/reassessment proceedings, if there is any tax liability, the Revenue may not be in a position to recover the amount thereafter, in such a case only, however, on formation of subjective satisfaction/opinion, the Commissioner may exercise the powers under Section 45 of the VAT Act. 72. It is evident from the facts noted above that the order of provisional attachment was passed before the proceedings against the appellant were initiated under Section 74 of the Hpgst Act. Section 83 of the Act requires that there must be pendency of proceedings under the relevant provisions mentioned above against the taxable person whose property is sought to be attached. We are unable to accept the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 67 or Section 73 or Section 74. Therefore, once the final order of assessment is passed under Section 74 the order of provisional attachment must cease to subsist. Therefore, after the final order under Section 74 of the Hpgst Act was passed on 18-2-2021, the order of provisional attachment must come to an end. 11. The said judgment which was passed while dealing with identical provisions under the CGST Act, 2017 and Rules made there under was followed by this Court in the context of Section 281B of the I.T. Act by this Court in Indian Minerals Case (supra), wherein it was held as under:- 8. As held by the Apex Court in the aforesaid decision, mere apprehension on the part of the respondents that huge tax demands are likely to be raised on completion of assessment is not sufficient for the purpose of passing a provisional order of attachment. It has also been held that apart from the fact that a writ petition under Article 226 of the Constitution of India challenging the provisional attachment order was maintainable, having regard to the fact that the provisional attachment order of a property of a taxable person including the bank account of such person is draconian in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady been initiated coupled with the fact that Section 281 of the said Act of 1961, contemplates that any alienation of any property belonging to the petitioners would be null and void, in addition to the specific assertion made by the petitioner that they own and possess immovable property to the tune of more than Rs.300 crores, the said apprehension of the respondents is clearly unfounded and without any basis and consequently, the said apprehension of the respondents cannot be accepted . 12. In the instant case, a perusal of the impugned order will clearly indicate that the same is arbitrary and reflects premeditated conclusion without recording either an opinion or necessary to attach the property; the doctrine of proportionality which is implicated in the purpose and necessity of provisional attachment mandates the existence of a proximate or a live link between the need for the attachment and the purpose which it is intended to secure. 13. Further, mere apprehension that huge tax demands are likely to be raised on completion of assessment is not sufficient for the purpose of passing a provisional attachment order and the exercise of the same must necessarily be preceded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose and necessity of provisional attachment which implicate the doctrine of proportionality. Under these circumstances also, I am of the considered opinion that the impugned order deserves to be quashed. 9.10 On perusal of the entire material on record, we are satisfied that the said independent arrival of opinion that there was a reason to believe is not found forthcoming from the order issued blocking the said credit and it is entirely based on the satisfaction of another officer; it is quite possible that the transaction, when entered into in 2017 or 2018 could be genuine and when the officer visits in 2020 or 2021, the business could have been closed and therefore the mere closure of business in 2020 or 2021 cannot be a basis for denying credit availed earlier. All these factors required that the respondents-revenue ought to have carefully considered and verified all aspects before taking such a drastic action of blocking credit under Rule 86A which is yet another circumstance that would vitiate the impugned order. 9.11 The aforesaid facts and circumstances are sufficient to come to the unmistakable conclusion that in the absence of valid nor sufficient material which const ..... X X X X Extracts X X X X X X X X Extracts X X X X
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