9911796707
TMI Blog2023 (11) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... e case in brief are that the petitioner herein is a supplier of goods and is registered under the provisions of Central Goods and Services Tax Act, 2017, and State Goods and Services Tax Act, 2017, and is carrying on the business of sale and purchase of iron and steel scrap. On the alleged ground of the petitioner having utilized irregular Input Tax Credit (for short 'ITC') relying upon the invoices issued to two supplying dealers by name M/s. Sri Lakshmi Narsimha Traders and M/s. PMS Enterprises which according to the respondent No. 2 are non-existing firms, the respondent No. 2 had issued notice dated 07.07.2023. To the said notice, the petitioner is said to have responded vide correspondences dated 21.07.2023, 26.10.2023 and 27.10.2023 and in addition he had also made representations to various authorities in this regard. Without there being any further deliberations, discussions and notice, the authority concerned have straightaway now issued the order of blocking the ITC of the petitioner on 14.08.2023 which is under question in the present writ petition. 4. Challenging the same, the learned counsel for the petitioner contends that the authority concerned has not given any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced records, but what is apparent is the fact that the impugned order does not seem to have been any specific order issued by the authority concerned blocking the ITC available to the petitioner in the electronic cash ledger. Neither was any such order issued or served upon the petitioner intimating the action of blocking the ITC. The documents also do not reflect any specific steps being taken after the initial notice was issued upon the petitioner on 07.07.2023 to which the petitioner had immediately responded on 21.07.2023 followed by various reminders of the same nature with correspondences made to the higher officers in the Department as well. 9. What is also reflected is the fact that though there has been repeated representations, reminders and responses given by the petitioner to the initial notice dated 07.07.2023, there has been no discussion on any of the contempt's on the part of the authority concerned while passing the order of blocking the ITC available to the petitioner in the electronic cash ledger. 10. In the admitted factual backdrop of the case, it would be relevant at this juncture to take note of the policy decisions of the Central Board of Indirect Taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 in somewhat similar circumstances and in respect of the same provisions of law in paragraph Nos .17, 18, 19, 20 and 23 held as under: "17. As regards the following of principles of natural justice, the law is now well settled. In cases involving civil consequences, these principles would be required to be followed although, the width, amplitude and extent of their applicability may differ from case to case depending upon the nature of the power to be exercised and the speed with which the power it to be used. Usually, it would suppose prior hearing before it's exercise (See Swadeshi Cotton Mills Vs. Union of India : (1981) 1 SCC 664 and Nirma Industries Limited and another Vs. Securities and Exchange Board of India : (2013) 8 SCC 20). But, it is not necessary that such prior hearing would be granted in each and every case. Sometimes, the power may be conferred to meet some urgency and in such a case expedition would be the hallmark of the power. In such a case, it would be practically impossible to give prior notice or prior hearing and here the rule of natural justice would expect that at least a post decisional hearing or remedial hearing is granted so that the damage done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fabric of our Constitutional order made up by Articles 14 and 21 of the Constitution of India. In the case of Andhra Bank V/s. Official Liquidator : (2005) 3 SCJ 762, the Apex Court has held that an unreasoned order does not subserve the doctrine of fair play. It then follows that the word, "may" used before the words, "for the reasons recorded in writing" signifies nothing but a mandatory duty of the competent authority to record reasons in writing. 19. There is another reason which we would like to state here to support our conclusion just made. The power under rule 86- A is of enabling kind and it is conferred upon the Commissioner for public benefit and, therefore, it is in the nature of a public duty. Essential attribute of a public duty is that it is exercised only when the circumstances so demand and not when they do not justify its performance (see Commissioner of Police, Bombay Vs. Gordhandas Bhanji : AIR (39) 1952 Supreme Court 16). It would then mean that justification for exercise of the power has to be found by the authority by making a subjective satisfaction on the basis of objective material and such satisfaction must be reflected in the reasons recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. and the actual physical movement of the goods by producing the cogent materials, the Assessing Officer was absolutely justified in denying the ITC, which was confirmed by the first Appellate Authority. Both, the second Appellate Authority as well as the High Court have materially erred in allowing the ITC despite the concerned purchasing dealers failed to prove the genuineness of the transactions and failed to discharge the burden of proof as per section 70 of the KVAT Act, 2003. The impugned judgment(s) and order(s) passed by the High Court and the second Appellate Authority allowing the ITC are unsustainable and deserve to be quashed and set aside and are hereby quashed and set aside. The orders passed by the Assessing Officer denying the ITC to the concerned purchasing dealers, confirmed by the first Appellate Authority are hereby restored." 13. Now if we look into the documents produced by the learned counsel for the respondent-Department, it would reveal that there is not much cogent substantial material available to show that the order/decision on the part of the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
