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TMI Blog2015 (3) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner's tax liability. - Resultantly, the subsequent orders insisting on providing Bank Guarantees for lifting such orders would also be rendered invalid. The respondents shall release the Bank Guarantees - Petition is disposed of. - SPECIAL CIVIL APPLICATION NO. 12592 of 2014 - - - Dated:- 28-11-2014 - MR. AKIL KURESHI AND MR. VIPUL M. PANCHOLI, JJ. FOR THE APPELLANT : R SN SOPARKAR, SENIOR ADVOCATE WITH MR DHAVAL SHAH AND HD DHARMADHIKARI, ADVOCATES FOR THE RESPONDENT : MR JAIMIN GANDHI, AGP JUDGEMENT Per: Akil Kureshi: 1. Heard learned counsel for the parties for final disposal of the petition. Petitioner has challenged series of orders produced as at Annexure I collectively under which the Commercial Tax Officer has attached the properties of the petitioner on the ground that a huge tax demand of ₹ 3.80 crores is likely to arise against the petitioner for unpaid Value Added Tax. 2. Brief facts are as under: 2.1. The petitioner is a company registered under the Companies Act. The petitioner is engaged in trading of Thermoplastic Road Marking material, commonly used for marking and creating strips on the road such as Zebra Crossing and Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as an industrial input. 4. The assessment proceedings pursuant to such showcause notice are going on. The petitioner opposes the proposals contained in the showcause notice contending that the earlier declaration and the calculation of tax was correct. At that stage, the respondents issued impugned orders in exercise of powers under Section 45 of the VAT Act attaching various properties of the petitioner. By way of a sample, if we look at the first of such orders, it is one dated 25.04.2014 in which it is recorded that during the spot inspection of the petitioner's place of business between 05.04.2014 to 07.04.2014, various details were collected. It was found that the petitioner pays tax at the rate of 5% treating the product as an industrial input falling under entry 42A of II Schedule to the VAT Act, whereas such product is not specified elsewhere, and would, therefore, fall within the residuary clause 87 of II Schedule to the VAT Act, inviting tax at the rate of 12.5% plus 2.5%. For the year 2010-2011, the tax would come to ₹ 3.80 crores. There would be further liability of interest. For such recoveries assessing authority has already issued notices to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of protecting the interest of Government revenue, it is necessary to do so. The power thus, is of drastic nature. Any such power, therefore, is coupled with the duty to exercise such power with due care and in appropriate cases. Subsection (2) of Section 45 when specifies the life of such order of provisional assessment for a maximum period of one year, it further amplifies that the same is in the nature of a drastic measure for a temporary period. The authority exercising such powers, therefore, must have a strong prima facie case to show that upon ultimate conclusion of the assessment, there is every likelihood of tax, interest and/or liability being attached on a dealer, and further that pending such consideration, it is necessary in the interest of Government revenue to pass order of provisional attachment. Such powers cannot be exercised in a routine manner in every case of reopening of assessment de hors the consideration noted above and in any case not merely because some assessment proceedings are pending. At that stage, it is merely a prima facie, exparte opinion of the assessing authority that a certain tax demand is likely to arise. This would be subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Note(2) Where any commodities are described against any heading or, subheading or as the case may be, tariff item, and the aforesaid description is different in any manner from the corresponding description in the Central Excise Tariff Act, 1985, then only those commodities described as aforesaid shall be covered by the scope of this notification and other commodities though covered by the corresponding description in the Central Excise Tariff shall not be covered by the scope of this notification. Note(3) Subject to Note 2, for the purpose of any entry contained this notification, where the description against any heading or, as the case may be, subheading, matches fully with the corresponding description in the central Excise Tariff, then all the commodities covered for the purpose of the said tariff under that heading or subheading or as the case may be, tariff item, shall be covered by the scope of this notification. Note(4) Where the description against any heading or subheading or as the case may be, tariff item, is shown as other , then interpretation as provided in Note 2 shall apply. 11. In short, as per these notes, u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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