The proper officer must have reasons to believe that the taxable person has suppressed taxable transactions to evade tax in order to justify the provisional attachment of the taxable person's property under section 83 of the CGST Act.

JUDGMENT :

P. C.:— Heard Mr. V. Sridharan, learned senior counsel for the petitioner; and Mr. J. B. Mishra, learned counsel for the respondents.

2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 18th/19th November, 2020 passed by respondent No. 2 provisionally attaching the bank accounts of the petitioner maintained with respondent No. 3.

3. The matter was heard on 17th December, 2020 on the interim prayer on which date Mr. Mishra had also produced the record in original which we have perused.

4. Before adverting to the impugned order we may briefly indicate that the petitioner, a company incorporated under the Companies Act, 1956, is engaged in the business of manufacture and supply of carbonated fruit drinks, such as, Big Cola, Big Orange Cola, Big Lemon and similar other products. Petitioner has been manufacturing such fruit juice based drinks since December, 2017 having more than 5% juice content in apple drink and 2.5% in respect of lemon drink. Petitioner has been classifying such goods under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and specified at Serial No. 48 under Schedule-II as “fruit pulp or fruit juice based drinks” of the Central Government Notification dated 28th June, 2017 taxable at the rate of 12%. According to the petitioner, the above classification is in conformity with the judgment of the Supreme Court in case of Parle Agro (P) Ltd. vs. Commissioner of Commercial Taxes, Trivandrum, 2017(352) ELT 113 and also of the Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the case of Brindavan Beverages Private Limited vs. Commissioner of Customs, which were rendered prior to introduction of Goods and Services Tax (GST). It is stated that in respect of one of the group companies of the petitioner, namely, M/s Anutham Exim Private Limited, Commissioner of Customs (Appeals), Kolkata by order dated 8th June, 2020 has upheld such classification.

5. Petitioner has stated that on the basis of such classification petitioner has been filing its GST returns and paying the taxes regularly.

6. According to the petitioner, the departmental authorities initiated investigation sometime in March, 2019 with regard to classification of the goods which was however dropped. Such inquiry was revived in January, 2020 but no progress was made because of Covid-19 pandemic and the resultant lockdown. Then on 21st September, 2020, officials of respondent No. 2 visited the petitioner’s factory for further investigation. Summons were issued to the petitioner on 21st September, 2020 itself for appearance of director and other authorized representatives which was complied with. It appears that statement of one of the foreign directors was recorded on 22nd September, 2020.

7. However, the impugned order dated 18th/19th November, 2020 was issued by respondent No. 2 and addressed to the Branch Manager, ICICI Bank, Nagari Reespost, Mohopada, Khalapur, Raigad provisionally attaching bank accounts of the petitioner under section 83 of the Central Goods and Services Tax Act, 2017 (briefly “the CGST Act” hereinafter). Order dated 18th/19th November, 2020 is extracted hereunder :—

“Date:18-11-2020

Reference No. V/PI/RGD/GR-II/30-93/AJE India/18-19

To,

The Branch Manager,

ICICI Bank, (IFSC-ICIC0001627)

Address-Survey No. 177/3A/B, 40 KVL,

Nagari Reespost, Mohopada,

Khalapur, Raigad- 410222.

Provisional attachment of Property under section 83

It is to inform that M/s AJE India Pvt. Ltd. having principal place of business at A-21, A 1, 2, 3, MIDC Patalganga, Khalapur, Raigad-410220 bearing registration number as 27AAHCA9177AIZN, PANAAHCA9177A is a registered taxable person under the CGST Act, 2017. Proceedings have been launched against the aforesaid taxable person under section 67 of the said Act to determine the tax or any other amount due from the said person. As per information available with the department, it has come to my notice that the said person