2021 (2) TMI 3 - HC - VAT and Sales Tax

Issuance of demand notice - attachment of bank account of the assessee in a case in which the assessee has filed an appeal together with a stay application against an order of assessment - Section 44 of the Gujarat Value Added Tax Act, 2003 - HELD THAT - It appears that against the order of assessment passed by the Assessing Authority, the writ applicant has filed an appeal before the First Appellate Authority. Let Notice for final disposal be issued to the respondents, returnable on 13.01.2021. Having regard to the settled position of law, the respondents would be well advised if they deem fit to revoke the attachment in the meantime. On the returnable date, notify the matter on top of the Board. It is clarified that no amount shall be appropriated from the current bank account of the writ applicant to the State Treasury.

Summary

Issues:
1. Whether the Assessing Authority can issue a notice of demand and pass an order under Section 44 of the Gujarat Value Added Tax Act, 2003, attaching the bank account of the assessee in a case where an appeal with a stay application against an assessment order has been filed?

Analysis:
The High Court considered the issue of whether the Assessing Authority can attach the bank account of an assessee under Section 44 of the VAT Act when an appeal with a stay application is pending against the assessment order. The court noted that the writ applicant had filed an appeal before the First Appellate Authority against the assessment order, and a stay application was also submitted in July 2020. However, no orders had been passed on the stay application. The court referred to a previous decision by a Coordinate Bench in the case of Automark Industries (I) Ltd. Vs. State of Gujarat, which seemed to address the raised issue.

The court acknowledged that the matter could have been disposed of on the same day due to the settled legal position. Still, the learned AGP requested time to seek instructions. Consequently, the court directed the issuance of a Notice for final disposal to the respondents, returnable on 13.01.2021. The court advised the respondents to consider revoking the attachment in the interim, given the established legal position. It was clarified that no funds should be appropriated from the current bank account of the writ applicant to the State Treasury until further proceedings.

This judgment highlights the importance of considering the legal provisions and precedents when dealing with issues related to attaching bank accounts in taxation matters. The court's decision to issue a Notice for final disposal indicates a proactive approach to resolving the matter while ensuring fairness and adherence to legal principles. The court's emphasis on preventing appropriation from the bank account underscores the need to protect the rights of the parties involved pending a final decision.