2020 (2) TMI 126 - HC - VAT and Sales Tax

Principles of natural justice - provisional attachment of bank accounts - Gujarat VAT Act - HELD THAT - It appears that on 01.09.2016, the business premises of the writ-applicant was searched. The authority concerned proceeded to pass an order of provisional attachment of the three bank accounts - It appears that simultaneously the order of provisional attachment of the residential premises of the writ-applicant also came to be passed. Thus, the writ-applicant is aggrieved by such action on the part of the respondent authorities. The life of the order of provisional attachment is one year from the date of the order made under sub-section (1) of Section 45 of the VAT Act, 2003 - In such circumstances, the three bank accounts as well as the residential house cannot be said to be in any sort of attachment. This fact should be brought to the notice of the three banks. Application disposed off.

Summary

Issues:
1. Validity of orders for provisional attachment under Section 45(1) of the Gujarat Value Added Tax Act, 2003.
2. Grievance against the attachment of bank accounts and residential property.
3. Duration of provisional attachment as per Section 45 of the VAT Act, 2003.
4. Compliance by the concerned authority to communicate the lifting of attachments to the banks.

Analysis:
1. The writ-application challenged the orders dated 06.09.2016 and 07.11.2016 passed by the Respondent under Section 45(1) of the Gujarat Value Added Tax Act, 2003, seeking to quash the provisional attachment of the residential property and three bank accounts of the petitioner. The petitioner, engaged in the timber business, claimed to be a registered dealer under the VAT Act and the CST Act.

2. The authority conducted a search at the business premises on 01.09.2016, resulting in the provisional attachment of the Current A/c. No. 50158615832 with Allahabad Bank, Gandhidham, Saving A/c. No. 01211000264391 with HDFC Bank, Agra, and Savings A/c. No. 0192101060501 with Canara Bank, Agra, along with the residential premises of the petitioner. The petitioner contested the attachment as being aggrieved by the actions of the respondent authorities.

3. The duration of the provisional attachment, as per Section 45(1) of the VAT Act, 2003, is limited to one year from the date of the order. The judgment emphasized that after the expiry of this period, the provisional attachment ceases to have effect. Therefore, the bank accounts and residential property should no longer be under attachment, and the concerned authority was directed to communicate this to the banks promptly.

4. The Court disposed of the writ-application, instructing the authority to inform the banks about the lifting of the attachments, thereby allowing the petitioner to operate the bank accounts freely. The judgment highlighted the importance of compliance by the authority in promptly notifying the banks to ensure the petitioner's access to their accounts.