2018 (10) TMI 1566 - HC - Service Tax

Attachment of properties - flat belonging to the Director of the Petitioner Company - Bank accounts of the Petitioner s sister concern M/s. Patankar Hospitality Pvt. Ltd., and M/s. Patankar Hotels Enterprises Pvt. Ltd. - recovery of dues of petitioner - date of the receipt of the order dated 14th October, 2011. It is the case of the Respondents that the Petitioner was served with a copy of the order dated 14th October, 2011 in 2011 itself. Therefore, the impugned recovery notices as well as the attachment of bank accounts, were justified as the appeal was not filed within the statutory period of limitation to file the appeal. Held that - This is a case where, admittedly, there is a disputed issue of the date on which the order dated 14th October, 2011 passed by the Joint Commissioner of Service Tax Respondent No.3 was received by the Petitioner. It is the date of receipt of the order dated 14th October, 2011 which will decide the jurisdiction of the impugned recovery and attachment notices. In matters such as this, where the Respondent had attached the bank account of the Petitioner s sister concern for the recovery of the Petitioner s dues, the least that is expected of the Respondent would be to decide the preliminary issue of the date of the receipt of the order dated 14th October, 2011 as expeditiously as possible. This, as the attachment of bank account would cause prejudice to any person, carrying on business as it would cripple its capacity to do business. Orders for attachment of bank account vacated - However, we do not disturb the impugned recovery notices or attachment of the flat belonging to the Petitioner s Director. This, attachment would protect the interest of the Revenue.

Summary

Issues:
Challenge to recovery and attachment notices based on the date of receipt of the order by the Petitioner, jurisdiction of recovery notices, justification of recovery notices and attachment of bank accounts, expeditious decision-making in cases of attachment, locus to file the petition based on attachment of bank accounts.

Analysis:
The Petitioner challenged recovery and attachment notices issued based on an order confirming a Service Tax demand. The Petitioner claimed to have received the order only in 2018, filing an appeal with a deposit as required by law. The Respondents argued the Petitioner received the order in 2011, justifying the notices. The Court noted the crucial issue was the date of order receipt, leaving it to the Commissioner (Appeals) to decide. The hearing of the appeal was concluded, and the order was expected by a certain date, leading to adjournments.

The Court faced delays due to miscommunication regarding the order's expected date, with the Revenue's Counsel apologizing for the error. The Commissioner (Appeals) requested three more weeks to pass the order. The disputed issue of the order receipt date determined the jurisdiction of the recovery and attachment notices. The Court emphasized expeditious resolution due to the prejudice caused by bank account attachment hindering business operations.

Consequently, the Court vacated the bank account attachment notice but upheld the recovery notices and flat attachment to safeguard Revenue interests. The Revenue opposed relief, claiming the Petitioner lacked locus since the bank account belonged to a sister concern. The Court rejected this argument, stating the attachment was based on the Petitioner's tax dues, allowing the Petitioner to file the petition. The Court criticized the attachment of an independent party's account for the Petitioner's dues, deeming it jurisdictionally flawed.

Ultimately, the petition was disposed of without costs, and the Chamber Summons were deemed infructuous post-dismissal. The judgment highlighted the importance of timely decision-making in attachment cases and the need for accurate communication in legal proceedings.