a) ITC is a concession-The right conferred on the assessee is regulated by the provisions of the Act and it is a concession granted under the Statute and
unless and until the assessee complies with all the conditions scrupulously, he would not be entitled to avail the ITC.
b) Blocking of ITC does not tantamount to recovery but only a lien in favour of revenue-Rule 86A does not contemplate any recovery of tax from
an assessee. It creates a lien without actual recovery being made or attempted and thus action taken by competent authority is on a provisional basis.
c) Power under Rule 86A has been conferred for a public benefit and requires justification of exercise-The power under rule 86-A is of enabling
kind and it is conferred upon the Commissioner for public benefit and, therefore, it is a public duty. It would then mean that justification for exercise of
the power must be found by the authority by making a subjective satisfaction based on objective material and such satisfaction must be reflected in the
reasons recorded in writing while exercising the power.
d) Basic requisites for Exercise of Power-The first requisite which is required to be considered by the competent authority is with regard to the basis of
material available before he taking any action for blocking of electronic credit ledger. The second pre-requisite is of recording the reasons in writing for
invoking the powers under Rule 86A of the Rules of 2017. The powers can be invoked or exercised by the competent authority only in the event he has
reason to believe that the credit of input tax available in electronic credit ledger have been fraudulently availed or the assessee is ineligible for the same.
The powers vested with the competent authority are subject to the satisfaction recorded by the said authority on he forming an opinion to the effect that
the electronic credit ledger has been fraudulently availed or that the assessee is ineligible to avail the benefits of the same in situations where the Rule
provides for the competent authority to invoke the same.
e) Rule can be invoked only when balance is available in the Ledger-Rule 86A can be invoked only if the amount is available in the electronic credit
ledger and not otherwise. The heading of the provision of law or the marginal note can be always relied upon to clear any doubt or ambiguity in
interpretation of the provision to discern the legislative intent.
f) Personal hearing to be given post decision of blocking of ITC-Given the nature of power provided under Rule 86A though the statute does not
provide for a personal hearing before passing any order under the said Rule, it has to be read into the provisions of the said Rule which is not expressly
provided therein, so that a post-decisional or remedial hearing could be granted to the person/assessee affected by blocking of his electronic credit
Cases Referred- Basanta Kumar Shaw v. Assistant Commissioner of Revenue, Commercial Taxes and State Tax  141 taxmann.com 528, R.M.Dairy
Products LLP v. State of U.P. 129 taxmann.com 37,Samay Alloys India (P.) Ltd. v. State of Gujarat  135 taxmann.com 234/91 GST 338/2022
(61) G.S.T.L. 421 (Guj.) , S.S. Industries v. Union of India AIR Online 2020 Guj. 2077, New Nalbandh Traders v. State of Gujarat  136 taxmann.com
284, Rajnandini Metal Ltd. v. Union of India  140 taxmann.com 325, Dee Vee Projects Ltd. v. Government of Maharashtra  135 taxmann.com
189/91 GST 159 (Bom.), C.B.Gautam VS Union Of India & Others - (1993)1 SCC 78, Commissioner of Police, Bombay Vs. Gordhandas Bhanji : AIR (39)
1952 Supreme Court 16.