The petitioner challenged blocking of ITC under Rule 86A on the basis of alleged irregularities attributable to suppliers. The factual background showed that the petitioner had complied with summons and furnished documents, yet ITC was blocked without prior adjudication.
The Court held that Rule 86A is a drastic power and must be exercised strictly in accordance with law. Blocking of ITC without establishing the petitioner’s involvement and without following due process was held to be arbitrary. The blocked credit was directed to be restored.