TaxTMI 
TaxTMI 
2025 (12) TMI 681
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....f the Act, however, without any prior investigation or communication ITC of petitioner to the tune of Rs. 82,50,038/- in its ECL was blocked on 21.11.2023. Reference is made to intimation uploaded on online portal (Annexure P-3). Assistant Commissioner, CGST Division sent communication dated 17.11.2023 to Deputy Excise and Taxation Commissioner, Excise & Taxation Department, Jagadhri in respect to blocking of Input Tax Credit (ITC) of recipients of M/s M.S. Trading Company. It was informed that supplier M/s M.S. Trading Company was found non-existent at its principal place of business and it appeared from perusal of GSTR-1 return filed by supplier that it had passed on ITC to various firms. ITC in question was requested to be blocked in accordance with provisions of Rule 86A of CGST/HGST Rules, 2017 (for short - '2017 Rules'). It is stated that no opportunity was afforded to petitioner to prove genuineness of purchases before blocking the ITC. Petitioner, subsequent to blocking of its ITC, submitted detailed representation dated 01.01.2024 while explaining that it is a bona fide purchaser and has availed ITC on the basis of purchased documents, duly available with it. Upon consider....
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.... (1) The Commissioner or an officer authorised by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as- a) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36- i. issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or ii. without receipt of goods or services or both; or b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or d) the registered person availing any credit of input tax is not in possession of a tax inv....
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....disha v. Satish Kumar Ishwardas Gajbhiye (2021)17 SCC 90, Rai Sahib Ram Jawaya Kapur v. State of Punjab AIR 1955 SC 549, Lohia Machines Ltd. v. Union of India (1985) 2 SCC 197, Pt. Banarsi Das Bhanot v. State of Madhya Pradesh AIR 1958 SC 909 and Sant Ram Sharma v. State of Rajasthan AIR 1967 SC 1910, Hon'ble the Supreme Court concluded that provisional attachment is a pre-emptive measure to protect interests of government revenue and, thus, cannot be employed as measure of recovery. Period of one year is sufficient for revenue to conclude its investigation. Under the garb of renewal, a provisional attachment order cannot continue with no change in circumstances. An act which cannot be done directly, cannot be done indirectly. Relevant portion of judgment reads as under:- "29. Not to speak of a statutory conferment of power, there is a complete absence of any executive instruction consistent with the legislative policy and intendment of the CGST Act authorizing renewal of a lapsed provisional attachment order. Viewed from either angle, issuance of the provisional attachment orders by the respondent under challenge before the Gujarat High Court appears to be indefensible as....
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.... recovery measure; for that, the statue has other provisions. Certainly, a period of one year, as ordained by the legislature, is enough for the revenue authorities to conclude its investigation; if not, the legislature could have provided for a renewal or an extended period as in the Excise Act and the Customs Act. Sub-section (2) of Section 83 does not provide for any exception to the rule. Any explanation given by the respondent for issuing a renewal would be in the teeth of the established procedure. Once the inquiry culminates into a final demand, recourse must be had to the provisions under the section which provide for recovery of the assessed tax, penalty, interest, etc. This also provides opportunity to the assessee to challenge the same before the appropriate authority. Short-circuiting the procedure by pursuing a provisional attachment as a means to recover the tax due, as a natural consequence, would frustrate the intent and purpose of the statute. xxx xxx xxx 39. The appellant's argument that the Parliament, being cognizant of other taxing statutes, deliberately chose not to incorporate an extension provision in the section, also carries considera....