2019 (10) TMI 406 - HC - VAT and Sales Tax

Attachment of Bank Accounts - pendency of the stay application before the first appellate authority - HELD THAT - The petitioner has preferred an appeal before the first appellate authority being the Joint Commissioner of Commercial Tax (Appeals), Ahmedabad. During the pendency of such appeal, the respondent No.2 has, on 16.5.2019, resorted to powers under section 44 of the GVAT Act and attached the bank account of the petitioner. Thereafter, the stay application of the petitioner has been rejected as the petitioner had not shown willingness to pre-deposit 20% of the demand, against which the petitioner has preferred an appeal before the Tribunal, which is pending. Thus, despite the fact that the stay application of the petitioner was pending hearing before the first appellate authority, the second respondent authority has resorted to the drastic action of attaching the above-referred bank account of the petitioner under section 44 of the GVAT Act. Having regard to the pendency of the stay application in the appeal against the assessment order, the second respondent ought to have stayed his hands and not resorted to the drastic action of attaching the bank account of the petitioner - Impugned order do not sustain - petition allowed.

Summary

Issues:
Challenge to notice issued under section 44 of the Gujarat Value Added Tax Act, 2003 for attaching bank account during pendency of appeal before first appellate authority.

Analysis:
The petitioner challenged a notice dated 16.8.2019 issued by the Assistant Commissioner of Commercial Tax under section 44 of the GVAT Act, attaching the petitioner's bank account. The assessment order led to a tax demand of ?24,57,753 along with interest under section 42(5) of the GVAT Act. The petitioner appealed, and while the stay application was pending, the bank account was attached. The first appeal was dismissed as the petitioner did not pre-deposit a specific amount. Subsequently, the petitioner appealed to the Gujarat Value Added Tax Tribunal against this order.

The High Court noted that the petitioner had appealed before the first appellate authority, and during this appeal's pendency, the respondent attached the bank account under section 44 of the GVAT Act. Despite the stay application being pending, the attachment was made. The Court held that considering the stay application's pendency, the respondent should not have attached the bank account. Therefore, the court quashed the impugned order dated 16.8.2019 under section 44 of the GVAT Act. However, to secure the Revenue's interest, the petitioner was directed to maintain ?8,52,841 in the bank account, as directed by the first appellate authority for pre-deposit.

In conclusion, the petition succeeded, and the impugned order was quashed and set aside. The petitioner was required to maintain a specific amount in the bank account for the Revenue's interest. The rule was made absolute accordingly, and direct service was permitted.