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2019 Supreme(Guj) 723
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B. PARDIWALA, A.C. RAO, JJ.
Cengres Tiles Ltd. - Appellant
Versus
State of Gujarat - Respondent
R/Special Civil Application No. 19180 of 2018
Decided On : 19-06-2019
Advocate Appeared:
For the Appellant : Zubin F. Bharda
Headnote:
Taxation – Constitution of India – Article 226 – Companies Act, 1956 – Central Goods and Services Tax Act, 2017 – Section 83 – Challenge the provisional attachment orders directing the attachment of Bank Accounts held by writ applicant passed by the Assistant Commissioner of State Tax – {etitioner has invited the attention of the court to the provisions of section 83 of the Act, 2017 to point out that the same provides for provisional attachment to protect revenue in certain cases, and lays down that where during the pendency of any proceedings under section 62, 63, 64, 67, 73 or 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, provisionally attach any property including a bank account, belonging to the taxable person – Submitted that the petitioner has no intention of evading payment of the tax and that the petitioner had approached the concerned authority to grant instalments to it to clear the outstanding dues. It was submitted that despite the same, the respondent has continued with the provisional attachment – Whether the authority committed any error in passing the impugned orders of provisional attachment of goods and Bank Accounts under section 83 of the Act – Held, Section 46 referred to above, is with regard to notice to return defaulter. Plain reading of section 46 would indicate that if a registered person fails to furnish a Return under section 39 or section 44 or section 45, a Notice would be issued requiring him to furnish such Return within a period of 15 days in such form and manner as it has been prescribed – Section 62 clarifies that if a registered person, to whom a Notice under section 46 has been served, fails to furnish the Return, the proper officer may, thereafter proceed to assess the tax liability of such person to the best of his judgment taking into account all the material available with him and issue the Assessment Order within a period of five years from the date specified under section 44 for furnishing of the Annual Return for the financial year to which the tax not paid relates – According to the scheme of the Act, section 83 would come into play only after the necessary action is taken under section 62 of the Act, referred to above – Language of section 83 is plain and simple. Section 83 makes it clear that during the pendency of any proceedings under section 62, if the Commissioner is of opinion that for the purpose of protecting the interest of the Government revenue he may, by order in writing, attach provisionally any property including Bank Account belonging to the taxable person – It appears that much before the notice under section 46 came to be issued or rather, much before the assessment could be undertaken under section 62 of the Act, the authority straightway proceeded to pass orders of provisional attachment of the goods as well as two Bank Accounts, referred to above. Such action, in our opinion, cannot be said to be in accordance with law – impugned orders of provisional attachment of the goods as well as the two Bank Accounts deserve to be quashed and the same are hereby quashed and set aside – Order accordingly. (Paras 10 and 11)
ORDER :
J.B. PARDIWALA, J.
1. RULE, returnable forthwith. Ms. Maithili Mehta, the learned Assistant Government Pleader waives service of notice of Rule for and on behalf of the respondents.
2. By this writ application under Article 226 of the Constitution of India, the writ applicant, a Company, registered under the Companies Act, 1956, has prayed for the following main reliefs:-
"(A) That this Hon'ble Court be pleased to admit the petition.
(B) That this Hon'ble Court be pleased to quash and set aside the provisional orders of attachment dated 30/10/2018, 26/11/2018 and 27/11/2018 passed by the Assistant Commissioner of Sales Tax (Unit-33), Kadi, District Mehsana/respondent No. 3 herein (Annexure-C, D and E to the petition) and declare them to be illegal, high handed, unjust, arbitrary and premature.
(C) That this Hon'ble Court be pleased to direct the respondents more particularly the respondent No. 3 to withdraw orders of provisional attachment dated 30/10/2018, 26/11/2018 and 27/11/2018 and direct the respondents to withdraw the petitioner to allow the petitioner to pay the arrears of the Goods and Service Tax by way of equal monthly instalments as requested in its representation dated 26/11/2018 and 28/11/2018 respectively."
3. The writ applicant seeks to challenge the provisional attachment orders dated 26/11/2018 directing the attachment of the Bank Account No. 30336873890 held by the writ applicant with the State Bank of India, commercial Branch, Ahmedabad and also the Account No. 910020038421143 held by the writ applicant with the Axis bank, Sarkhej Gandhinagar Highway Branch, Ahmedabad, passed by the Assistant Commissioner of State Tax (Unit-33), Kadi, District Mehsana. The writ applicant also seeks to challenge the provisional attachment orders dated 30/10/2018 and 27/11/2018, respectively, directing attachment of the stock worth Rs. 12,00,00,000/- (Rupees Twelve Crores) and Rs. 19,17,81,818/- (Rupees Nineteen Crores Seventeen Lacs Eighty One Thousand Eight Hundred Eighteen only) respectively, held by the writ applicant in its factory premises on the respective dates.
4. As a neat question of law has been raised in this writ application, we need not to go much into the facts.
5. On 11/12/2018, a Co-ordinate Bench of this Court passed the following order:-
'1. Mr. Zubin Bharda, learned advocate for the petitioner has invited the attention of the court to the provisions of section 83 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the Act"), to point out that the same provides for provisional attachment to protect revenue in certain cases, and lays down that where during the pendency of any proceedings under section 62, 63, 64, 67, 73 or 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, provisionally attach any property including a bank account, belonging to the taxable person. Reference was made to section 62 of the Act, to submit that the same comes into operation where a registered person fails to furnish the return under section 39 or section 45, even after the service of a notice under section 46, in which case the proper officer may proceed to assess the tax liability of the said person. Reference was made to section 46 of the Act which bears the heading "Notice to return defaulters" and provides that where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner, as may be prescribed. It was pointed out that a notice under section 46 of the Act was issued to the petitioner on 27.11.2018 calling upon it to furnish a return within fifteen days failing which, the tax liability would be assessed under section 62 of the Act. It was pointed out that though such notice under section 46 has been issued only on 27.11.2018, the third respondent Assistant Commissioner
