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2024 (1) TMI 76 - HC - GSTValidity of provisional attachment order - issue under Chapter XV of APGST Act, 2017 - It is contended that Section 83 authorizes the provisional attachment not only during the pendency of any proceedings U/s 62 or 63 or 64 or 67 or 73 or Section 74 but after initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV . HELD THAT - Even after filing of the counter by the respondents, there is no scope to reverse the opinion expressed by this Court in the interim order. No doubt in the counter it is claimed by the respondents that order DRC-22 under Section 83 was issued giving specified reasons. However, on perusal of the provisional attachment order dated 01.04.2022 issued by the 4th respondent under Form GST DRC 22 r/w Rule 159(1), it does not contain any reasons except mentioning that in order to protect the interest of the revenue and in exercise of the powers conferred U/s 83 of the Act the said order was issued. Needles to emphasize that reasons are live-nerve of any order of the public authority, without which the effected party cannot effectively oppose and submit his stand. Thus, in essence the reason given by this Court for passing interim order holds good even in the main writ petition also. The averments in the counter and passing of the assessment order will not improve the case of respondents in the main writ petition to uphold the provisional attachment order passed by the 4th respondent. Therefore, the writ petition deserves to be allowed. The impugned proceedings issued by the 4th respondent are hereby set aside - Petition allowed.
Issues Involved:
The legality of provisional attachment orders under Form GST DRC - 22 challenged as illegal and arbitrary. Issue 1: Lack of Reasons in Provisional Attachment Orders - The petitioner challenged the provisional attachment orders for not recording reasons as required by Section 83 of the Act. - The Court observed that the absence of reasons in the orders made it impossible for the petitioner to file objections as per Rule 159(5) of the Rules. - Citing judgments, the Court emphasized the mandatory requirement of forming an opinion based on tangible material to protect the Government revenue. - The Court found that the 4th respondent failed to adhere to the mandatory requirement of opinion formation, leading to the grant of interim relief suspending the attachment orders. Issue 2: Pending Proceedings and Legality of Attachment - The petitioner argued that no proceedings were pending under Section 67, 73, or 74 of the Act at the time of attachment. - The Court noted the petitioner's contention that the respondent failed to show that proceedings under Section 67 were concluded, supporting it with a copy of the seizure order. - The Government Pleader contended that the provisional attachment was necessary to protect the Government revenue due to irregularities in input tax credit. - The Court, after considering submissions and judgments, found merit in the petitioner's case and granted interim suspension of the attachment orders. Issue 3: Lack of Essential Reasons in Attachment Orders - Despite the counter affidavit providing reasons for the attachment, the Court found that the provisional attachment order did not contain essential reasons. - The Court reiterated the importance of reasons in such orders for the affected party to effectively oppose and present their case. - The Court maintained its stance from the interim order, emphasizing that the absence of reasons rendered the attachment orders invalid. - The Court allowed the writ petition, setting aside the provisional attachment orders issued by the 4th respondent. Separate Judgement by the Judges: - The Honourable Judges U. Durga Prasad Rao and Smt. Justice Venkata presided over the case. - The Court analyzed the lack of reasons in the attachment orders, the legality of the attachment in the absence of pending proceedings, and the insufficiency of reasons provided in the counter affidavit. - Ultimately, the Court found in favor of the petitioner, setting aside the provisional attachment orders due to the failure to provide essential reasons, thereby allowing the writ petition.
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