Travacore Minerals And Transport Company Vs State of Karnataka (Karnataka High Court)
Karnataka High Court held that order passed blocking Input Tax Credit by invoking of rule 86A of the Central Goods and Services Tax Rules quashed as order was passed without providing pre-decisional hearing and without giving cogent reasons.
Facts- Vide the present petition, the petitioner has contested that the Input Tax Credit was blocked by the impugned order by invoking Rule 86A of the Central Goods and Services Tax Rules, 2017. Petitioner has also contested that before passing of the impugned order, pre-decisional hearing was not provided to the petitioner nor does the impugned order contain any reason to believe as to why it was necessary to block the ITC.
Conclusion- Held that in the instant case, since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the ITC of the petitioner does not contain independent or cogent reasons to believe except by placing reliance upon the reports of Enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by the Hon’ble Division Bench of this Court, the impugned order deserves to be quashed.
