Back
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, SANDEEP N. BHATT, JJ.
SMITA AND SONS COAL PRIVATE LIMITED – Petitioner
Versus
STATE OF GUJARAT – Respondent
Special Civil Application No. 10780 of 2022
Decided On : 01-02-2023
Gujarat Goods and Services Tax Act, 2017 - Section 83, 3, 70, (1), 62, 63, 64, 67, 73 - CGST Rules, 2017 - Rule 159 (5) - Order of provisional attachment of Bank - Filing return - Release Bank account - Challenges order of provisional attachment of Bank issued in FORM by respondent No. 2 attaching Bank account of petitioner on ground of violation of provisions of law – Held, Gravity of matter, when there is a direction for attachment of Bank account, Court needs to interfere following decision of Arya Metacast Pvt. Ltd. (supra) and also various decisions which have been referred to in that decision itself - Guidelines issued by Circular of CBEC also make it amply clear that remedy of attachment being by itself very extra ordinary needs to be resorted to with at most circumspection and maximum care and caution, which in instant case appear to have been missing and hence, that order needs to be quashed and set aside - Request on part of learned AGP of calculating interest and penalty presently is not being considered as procedure which has been followed is not what has been prescribed under law and Circular both - Nothing prevents respondent to follow procedure in accordance with law - Amount of tax which Bank is directed not to part with, let said amount be parted once there is a direction subject to crystallization of this liability of petitioner and subject to order of Appellate Authority if any appeal is preferred within time frame given under statute – Petition allowed.
JUDGMENT :
SONIA GOKANI, J.
1. The petitioner challenges the order of provisional attachment of the Bank under section 83 of the Gujarat Goods and Services Tax Act, 2017 (‘the Act’ hereinafter) issued on 18.05.2022 issued in FORM No. GST DRC-22 by the respondent No. 2 attaching the Bank account of the petitioner on the ground of the violation of provisions of law.
2. Brief facts leading to the present petition are as follow:
2.2 The respondent No. 2 is an officer under the provision of section 3 of the Act entrusted with the assessment and recovery of GST under various provisions of the Act.
2.3 The petitioner is regular in filing its return under the Act both annually and periodically.
2.4 During the period between 2018-19, the petitioner company had purchased Iron and Steel Waste Scrap from M/s. Arsh Enterprise, which has having valid GST registration at the time of purchase of goods. The goods worth Rs. 37,31,420/- had been purchased where the value of goods was of Rs. 31,53,746/- and the GST was Rs. 5,67,674/-. The goods purchased from M/s. Arsh Enterprise also had been sold by the petitioner to various other purchasers and the sale proceeds were received in his Bank account. The GST registration of M/s. Arsh Enterprise had been cancelled on 31.10.2020.
2.5 On 04.01.2022 summons under section 70 of the Act was issued to the petitioner where he was called upon by the respondent No. 2 to remain present for recording of statement and production of sales and purchase registers. The summons is silent regarding specific subject matter about the inquiry. The Director of the petitioner was unable to attend on specific date, the request of adjournment was made on 11.01.2022.
2.6 A detailed letter was addressed to the respondent No. 2 as no new date was given on 11.02.2022 submitting all documents. The petitioner again served with a letter from respondent No. 2 being the letter dated 10.03.2022 calling upon the petitioner to submit details of freehold immovable property, property card, index copy, etc. The respondent failed to indicate any live link with the document sought as well as with the inquiry which the summons under section 70 of the Act was issued.
2.7 It is averred by the petitioner that respondent No. 2 had taken extreme coercive steps, whereby his entire business came to a grinding halt by attaching the Bank account without any pending proceedings. With communication on 18.05.2022, FORM GST DRC-22 was issued on the Bank under section 83 of the Act.
2.8 On 21.05.2022, request was made by the petitioner to the respondent No. 2 to release the Bank account, however, till date the Bank account is not released and hence, this petition with the following prayers:
“7..........
(A) YOUR LORDSHIPS may be pleased to admit and allow this petition.
(B) YOUR LORDSHIPS may kindly be pleased to issue a writ of mandamus or an appropriate writ, orders directions and thereby be pleased to quash and set aside the order of provisional attachment of the petitioner’s current account bearing A/c No. 01592000001920 with Kotak Mahindra Bank Limited, Maninagar Branch, Ahmedabad dated 18.05.2022 passed by the respondent No. 2.
(C) Pending hearing and final disposal of the present petition, Your Lordships may kindly be pleased to issue an appropriate writ, orders, directions and thereby be pleased to stay the operation and implementation of the orders dated 18.05.2022.
(D) Ex-parte ad interim relief in terms of Para 7(C) may kindly be granted.
(E) To grant any other such relief in the nature of case may require.”
3. The emphasis on the part of the petitioner is that the recourse to the powers of section 83 of the Act could be only in exception circumstances. As a last resort, the Bank account be attached and hence, the present petition.
4. On issuance of the notice, appearance has been filed and affidavit-in-reply has
, time can be extended for a further period of six month. Appropriate order for extension of period of provisional attachment would only be passed upon satisfaction of the criteria listed out. An inj....
The necessity of the formation of opinion by the Commissioner, the live nexus to the purpose of protecting the interest of the government revenue, and the existence of tangible material before the Co....
The court established that provisional attachment under Section 83 of the CGST Act requires tangible evidence of necessity to protect government revenue, and such powers must be exercised with cautio....
The main legal point established in the judgment is that the provisional attachment under Section 83 of the CGST Act ceases to have effect after the expiry of one year from the date of the order, and....
The Commissioner must form an opinion based on relevant facts and tangible material with a live link to the formation of the opinion when exercising the power of provisional attachment under Section ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
