ORAL ORDER

(PER : HONOURABLE MR. JUSTICE NIRAL R. MEHTA)

[1] By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 4th March 2023 passed by the respondent – tax authority freezing of bank accounts of the petitioners for the VAT dues of M/s. Build India Construction Company, in which the petitioner No.1 is a partner.

[2] The brief facts of the case can be stated as under:

[2.1]The petitioner No.1 is a proprietor of the petitioner No.2 – company. The petitioner No.2 is into the business of construction and enrolled with GST 24UWPP3112G1ZK at Patan.

[2.2]The petitioners are having various accounts being one current account number 000431101000048, one cash credit account number 000431304000013 and one saving account number 00031001007030 with the Mehsana Urban Cooperative Bank, Patan Branch, Patan.

[2.3]The petitioner No.1 also happens to be the partner of one M/s. Build India Construction Company along with three other partners namely (i) Pancholi Amrishkumar G. (ii) Sureshkumar G.

Prajapati and (iii) Patel Ashokkumar Bachubhai.

[2.4]It appears that M/s. Build India Construction Company has not paid VAT assessment of Rs.4,67,315/- for the period from 1st April 2017 to 30th June 2017. In furtherance thereof, the respondent – State authorities, vide its order dated 4th March 2023, attached the various bank accounts of the petitioners.

[3] Being aggrieved and dissatisfied by the aforesaid action, the petitioners have approached this Court by way of this petition for the aforestated prayers.

[4] We have heard learned advocate Ms. Archana Patel for the petitioners and learned A.G.P. Mr. Chintan Dave for the respondents – State authorities.

[5] Learned advocate Ms. Archana Patel for the petitioners, while assailing the impugned action of the respondents, has made the following submissions:

[5.1] Learned advocate Ms. Patel submitted that the personal property of the petitioners cannot be attached for recovery of alleged dues of the company. Learned advocate Ms. Patel submitted that without following procedure prescribed under Section 44 of the Value Added Tax Act, 2003, the respondent No.2 has initiated recovery proceedings under the said section and threatened the bank managers of the aforesaid bank to issue Demand Draft of Rs.4,67,315/- in favour of “SBI VAT A/c” from the accounts of the petitioners. Learned advocate Ms. Patel, therefore, submitted that as a settled law, the action of the respondents in attaching the personal bank accounts of the petitioners are required to be quashed and set aside. To substantiate the aforesaid contentions, learned advocate Ms. Patel has heavily relied upon the following decisions:

(i) M. R. Choksi vs. State of Gujarat (2012) 51 VST 73 (Guj)

(ii) Pankaj Krishnavadan Mashruwala vs. State of Gujarat (2019) 68 GSTR 345 (Guj)

(iii) Green Berry Foils India Limited vs. State of Gujarat (Special Civil Application No.15644 of 2018 decided on 17th October 2019)

[6] By making above submissions, learned advocate Ms. Patel has requested this Court to allow the present petition as prayed for.

[7] Per contra, learned A.G.P. Mr. Chintan Dave for the respondents – State authorities, while supporting the impugned action, has made the following submissions:

[7.1]Learned A.G.P. submitted that freezing of the bank accounts under Section 44 of the VAT Act is perfectly justified and by way of said provision under Section 44 of the VAT Act, the special law of recovery prescribed which permits the respondents authorities to attach the bank accounts by way of passing garnishee order. Learned A.G.P. further submitted that by virtue of Section 54 of the VAT Act, 2003, even during the pendency of the assessment proceedings, the attachment of bank accounts is permissible so as to protect the interest of the Revenue.

[8] By making above submissions, learned A.G.P. has requested this Court to dismiss the present petition.

[9] We have heard learned advocates appearing for the respective