9911796707
TMI Blog2015 (5) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Gujarat Value Added Tax, 2003 (hereinafter referred to as the 'VAT Act') for making the recovery from the bank account of the petitioners. 3.2. The petitioners have further prayed for an appropriate writ, order or direction for release of the personal bank accounts of the 1st petitioner which have not even been referred to in the provisional attachment order. 4. It is the case on behalf of the petitioners that the 1st petitioner is a proprietorship firm engaged in the business of building construction and the 2nd petitioner is a proprietor of the 1st petitioner. That the proprietorship firm is duly registered under the VAT Act and it duly files returns and pays tax under the VAT Act and sale of the goods made in the course of execution of the works contract. 4.1. It appears that the search proceedings were conducted by the officers of the Commercial Tax Department on 13.04.2015 at the office, construction sites and residence of the petitioners. 4.2. It is the case on behalf of the petitioners that no incriminating evidence or unaccounted cash was found during the course of the search proceedings. It is the case on behalf of the petitioners that upon inquiry, the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the immovable property, the respondentauthority had proceeded to provisionally attach the bank account of the 1st petitioner under Section 45(1) of the VAT Act. The concerned officer has also issued garnishee notice under Section 44 of the VAT Act directing the bank to make payment from the bank account of the 1st petitioner. That, by order dated 17.04.2015, the concerned respondent-authority had also attached the personal bank account of the petitioner No.2, though in the provisional attachment order, there is no reference to the personal bank account of the petitioner No.2. 4.4. Feeling aggrieved and dissatisfied with the impugned orders of provisional attachment under Section 45(1) of the VAT Act; attaching the bank accounts of the petitioner No.1; issuing the garnishee notice with the respect to the bank accounts of the petitioner No.1 and attaching the personal bank account of the petitioner No.2, the petitioners have preferred the present Special Civil Application under Article 226 of the Constitution of India. 5. Shri S.N. Soparkar, learned Senior Counsel appearing with Shri Uchit Sheth, learned advocate for the petitioners has vehemently submitted that the learned Comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that, therefore, only on formation of the opinion by the Commissioner that such a provisional attachment is necessary to protect the interest of the Government Revenue, in that case only provisional attachment order can be passed. It is submitted that in a given case, on the basis of some reliable information or the past conduct of the dealer, it is found by the Commissioner that the concerned dealer against whom, the assessment or reassessment proceedings, as the case may be, are pending, is likely to sale the property so as to see that the Revenue subsequently may not be able to recover any amount of tax, interest and/or penalty due and payable and the interest of the Revenue is likely to be affected and/or defeated and in that case, on forming an opinion that it is necessary so to do, the Commissioner may by order in writing, attach provisionally any property belonging to the dealer in such manner as may be prescribed. It is submitted that however, for the aforesaid purpose, there must be a tangible material of objective facts with the Commissioner. 5.4. It is submitted by Shri Soparkar, learned Senior Counsel appearing for the petitioners that mere pendency of any asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Azad Society, Ambavadi, Ahmedabad shall neither be transferred nor will any encumbrances be created on the property during the pendency of the assessment proceedings under the VAT Act initiated by the notice dated 14.04.2015. The undertaking is directed to be taken on record. 5.9. Making the above submissions, it is requested to allow the present petition and quash and set aside the impugned order of provisional attachment of the bank accounts of the petitioners and garnishee notice and consequently allow the present petition with exemplary cost. 6. In response to the notice issued by this Court, Shri Chintan Dave, learned A.G.P. has appeared on behalf of the respondents. He has fairly conceded that in view of the security furnished by the petitioners of the immovable property worth Rs. 5 crores and the provisional attachment order dated 14.04.2015 to provisionally attach the immovable property of the petitioners worth Rs. 5 crores, the impugned order of provisional attachment of the bank accounts of the petitioners including the personal bank account of the petitioner No.2 and even the impugned garnishee notice are not warranted and not justified. He has fairly conceded that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank accounts of the petitioners and even the personal bank account of the petitioner No.2. Not only that, even the garnishee notice has been issued upon the respondent No.3-Punjab National Bank with respect to the bank accounts of the petitioners and the respondent No.3- Punjab National Bank is directed to pay to the Government, the amount lying in the bank accounts of the petitioners. At this stage, it is required to be noted that the garnishee notice is issued under Section 44 of the VAT Act. Therefore, when by order of provisional attachment of the immovable property worth Rs. 5 crores during the pendency of the assessment proceedings has already been passed, the interest of the Revenue has been already fully protected. Therefore, as such, there was no reason at all for the respondent No.2 to pass the impugned provisional attachment orders to attach the bank accounts of the petitioners and even the personal bank account of the petitioner No.2. 8.2. The order of provisional attachment has been passed under Section 45 of the VAT Act. Section 45 of the VAT Act reads as under:- "45. (1) Where during the pendency of any proceedings of assessment or reassessment of turnover esc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsoever for the respondent No.2 to pass the order under Section 45 of the VAT Act of provisional attachment of the bank accounts of the petitioners including the personal bank account of the petitioner No.2. Such an exercise of powers is absolutely illegal and most arbitrary which cannot be sustained. There is no justification pointed out to exercise powers under Section 45 of the VAT Act and passing the order of provisional attachment of the bank accounts of the petitioners including personal bank account of the petitioner no.2. There is no formation of opinion by the Commissioner that for the purpose of protecting the interest of the Government Revenue, the impugned order of provisional attachment of the bank account of the petitioners including the personal bank account of the pet No.2 has been passed. 8.5. Under the circumstances, the impugned order of provisional attachment of the bank accounts of the petitioners including the personal bank account of the petitioner No.2 cannot be sustained and the same deserves to be quashed and set aside. 9. Now, so far as the challenge to the impugned garnishee notice served upon the respondent No.3-Punjab National Bank with respect to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement in writing that the sum demanded or any part thereof is not due or payable to the dealer or that he does not hold any monies for or on account of the dealer, the Commissioner shall hold an inquiry and after giving to such person or dealer a reasonable opportunity of being heard, make such order as he thinks fit. (6) Any amount of monies which the aforesaid person is required to pay to the Commissioner, or for which he is personally liable to the Commissioner under this section shall, if it remains unpaid, be recoverable as an arrears of land revenue. (7) The Commissioner may apply to the court in whose custody there is monies belonging to the dealer for payment of the amount of such monies towards the outstanding amount of tax, interest and penalty payable by the dealer." 10. As observed hereinabove, as such, the assessment proceedings are still pending. As on today, there is no order passed against the petitioners under the VAT Act and there is no tax liability and/or any further liability under the VAT Act against the petitioners. On fair reading of Section 44 of the VAT Act, garnishee order/notice can be issued under Section 44 of the VAT Act with respect to any amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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