2018 (12) TMI 1414 - HC - VAT and Sales Tax

Provisional attachment of Bank Accounts - section 45(1) of the Gujarat Value Added Tax Act, 2003 - Held that - An order under section 45(1) of the Act would enure during the pendency of the proceedings of assessment or re-assessment, but once the assessment orders is passed, the authority concerned have to resort to the other provisions provided under the Act for recovery of the amount payable under the assessment orders if the dealer does not pay the same within the statutory time limit, however, they cannot continue with the provisional attachment made under sub-section (1) of section 45 of the Act. The continuance of the impugned orders after the making of the assessment orders, therefore, cannot be sustained. The continuance of the orders of provisional attachment under section 45(1) of the Act after the passing of the final assessment orders being bad in law, the second respondent is directed to forthwith lift the attachment of the bank accounts of the petitioner under the orders dated 16.10.2018 - Petition allowed in part.

Summary

Issues:
Challenge to provisional attachment of bank accounts under section 45(1) of the Gujarat Value Added Tax Act, 2003.

Analysis:
The petition contested the communications dated 16.10.2018, where the respondent attached the petitioner's bank accounts provisionally under section 45(1) of the Act. The petitioner argued that this attachment severely impacted their business operations and offered immovable property as security against the alleged liability. The respondent contended that assessment orders had been passed, demanding payment of a specific amount, making the petitioner liable. The court noted that the provisional attachment could only be maintained during assessment proceedings and had to be lifted once assessment orders were issued. The court emphasized the need to balance the petitioner's rights and the government's revenue interests.

The court held that the provisional attachment post-assessment orders was unlawful, directing the respondent to lift the attachment of the bank accounts. However, the petitioner was restrained from transferring the specified property and was required to maintain a specific sum in their account until the appellate authority decided on any stay application. The petitioner had to provide an undertaking not to alienate the mentioned properties in any manner until the appellate authority's decision. The rule was made absolute to the extent specified in the judgment.