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TMI Blog2015 (11) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... fourth respondent to stay his hands till the stay application of the petitioner is decided, unless the stay application is not decided on account of default on the part of the petitioner or it is found that the petitioner is unnecessarily delaying the hearing of the stay application. However, in the absence of any exceptional circumstances, there is no warrant for the respondent authorities to proceed to initiate coercive recovery in exercise of powers under section 44 of the Act by attaching the bank accounts of the petitioner. When the petitioner had already preferred an appeal with a stay application, the least that was expected of the fourth respondent was to wait for the outcome of the stay application before resorting to coercive measures as has been done in the present case. Besides, the orders under section 44 of the Act also suffer from the vice of non-application of mind, inasmuch as, in the notices issued to each of the banks, the fourth respondent has sought to recover the entire demand covered under the notice from each of the banks. - The impugned orders dated 17.7.2015, 9.6.2015 and 17.7.2015 (Annexure-E collectively to the petition) as well as the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings which culminated into an order of reassessment dated 30.4.2015 passed by the fourth respondent whereby the demand of differential duty on Thermoplastic Road Marking Material was raised. Being aggrieved, the petitioner preferred an appeal together with the stay application before the Deputy Commissioner of Commercial Tax (Appeals) under section 73 of the Act on 6.7.2015, well within the period of limitation. However, during the pendency of the hearing of the stay application and the appeal, the fourth respondent issued attachment orders dated 21.7.2015, 22.7.2015 and 10.8.2015 attaching the bank accounts operated by the petitioner at the Naroda branch of Bank of India, Yavatmal Branch of Bank of India and Nagpur Branch of Bank of India in Maharashtra, respectively. 5. On 27.7.2015, the third respondent Deputy Commissioner of Commercial Tax (Appeals) granted personal hearing on the stay application and directed the petitioner to deposit 20% of the amount for granting the stay. It is the case of the petitioner that the amount as directed has already been paid. Despite the aforesaid position, since the attachment orders were not lifted, the petitioner filed the present petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 11.9.2015, on the same day, without waiting for the notice period to be over, all the three bank accounts of the petitioner came to be attached in exercise of powers under section 44 of the Act, once again in relation to the entire demand covered under the demand notices. It was submitted that it is the case of the respondents that pursuant to the demand notices, the amount was required to be paid within a period of 30 days on receipt of the same; however, the respondents have ignored the fact that the petitioner has filed a stay petition as well as an appeal against the assessment orders. It was urged that on the one hand, the third respondent is not deciding the stay application filed by the petitioner and on the other hand, the fourth respondent has proceeded to attach the bank accounts of the petitioner. It was urged that a person s right to carry on business is seriously affected by the conduct of the respondents in taking such coercive measures routinely as a normal thing. It was submitted that when the petitioner has preferred appeals together with the stay applications within the period of limitation for filing such appeals, there was no warrant for the respondents to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the petitioner at the time of registration has submitted a form together with a checklist which reveals that the petitioner has no property situated in the State of Gujarat. It is in these circumstances, that with a view to secure the interest of the Government revenue, the orders under section 44 of the Act came to be passed. It was submitted that, therefore, the action of the fourth respondent being in consonance with the statutory provisions of section 44 of the Act, there is no warrant for interference by this court. 10. From the facts as emerging from the record, it appears that pursuant to the order of assessment (Annexure-B to the petition) made in relation to assessment year 2010-11, a notice of demand came to be issued to the petitioner for a sum of ₹ 1,16,18,836/- with interest at the rate of 18% for the period from 1.4.2010 to 31.3.2011. Against the order of assessment, the petitioner preferred an appeal within the prescribed period of limitation together with a stay application. However, during the pendency of the stay application and the appeal, the fourth respondent Commercial Tax Officer (3), Ahmedabad in the exercise of powers under section 44 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fourth respondent is proceeding to make coercive recovery by attaching the bank accounts of the petitioner. 13. While it is true that under rule 27 of the rules, the respondent is empowered to call upon the petitioner to pay the amount assessed within a period of thirty days from the date of service of such notice, however, when the petitioner has preferred an appeal together with the stay application within the prescribed period of limitation, the respondents are required to act in a reasonable manner in connection with the notice issued under section 27 of the Act. The fourth respondent is required to keep in mind the fact that the petitioner has preferred appeals before the first appellate authority and that the stay applications are pending. That if the stay applications are allowed or partly allowed, the petitioner would be required to deposit only a part of the demand covered under the notice or may be even granted complete unconditional stay. Under the circumstances, it is expected of the fourth respondent to stay his hands till the stay application of the petitioner is decided, unless the stay application is not decided on account of default on the part of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal with a stay application, the least that was expected of the fourth respondent was to wait for the outcome of the stay application before resorting to coercive measures as has been done in the present case. Besides, the orders under section 44 of the Act also suffer from the vice of non-application of mind, inasmuch as, in the notices issued to each of the banks, the fourth respondent has sought to recover the entire demand covered under the notice from each of the banks. As rightly submitted by the learned counsel for the petitioner, in case there were sufficient funds in each of the bank accounts, the fourth respondent would have succeeded in recovering thrice the amount covered under the demand notice. When drastic powers are conferred on the executive, it is imperative that those powers be exercised with due sense of responsibility and with circumspection by an officer or authority. While the fourth respondent is vested with drastic powers under section 44 of the Act, it is expected that such powers are exercised in a reasonable manner and not arbitrarily, as has been done in the present case. As noticed hereinabove, though notice has been issued on 11.9.2015 calling upo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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