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TMI Blog2018 (4) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities visited the petitioners' work premises and noticed that the petitioners were not paying any tax either on branded or unbranded goods. According to the petitioners, under threat and coercion, the departmental authorities collected three cheques for a total amount of Rs. 19,74,886/-. The petitioners, however, instructed the bank not to clear the cheques. Accordingly, when the departmental authorities produced such cheques for realization, they were returned by the bank. This is a first grievance of the petitioners of the departmental authorities having forcibly collected cheques even before the petitioners' tax liability was ascertained. 5. On 27.02.2018, the department did two things (i) A show-cause notice was issued calling upon the petitioners why CGST and SGST totalling to Rs. 36,88,706/- not be recovered for the period between July 2017 and 20.02.2018; (ii) Simultaneously, on the same date, the department wrote to the petitioners' banks-Union Bank of India, Nizampura Branch, Baroda and IDBI Bank, Alkapuri Branch, Baroda provisionally attaching the petitioners' said bank accounts and instructed the banks not to allow the petitioners to operate the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... figure now proposes is Rs. 1,29,13,928/-. The crucial question is, could the department have issued such a notice in purported exercise of powers under section 74(3) of the CGST Act. 10. Chapter XV of the Central Goods and Services Tax Act pertains to demands and recovery. Section 73 contained in the said chapter pertains to the determination of tax unpaid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or willful misstatement or suppression of facts. This section thus provides the procedure for determination of tax which has remained unpaid on the ground other than fraud, willful misstatement or suppression of facts. Section 74 of the Act on the other hand, pertains to determination of tax unpaid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts, relevant portion of which reads as under: "74. Determination of tax unpaid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts: (1) Where it appears to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the person chargeable with tax under sub section (1) and the statement referred to in sub-section (3) of section 74 would be containing the details of tax unpaid, short paid etc. for purpose other than those covered under sub section (1). In other words, powers under sub-section (3) of section 74 cannot be exercised for expanding or enlarging the liability arising out of show-cause notice under sub-section (1) from the same period. Essentially, sub-sections (1) and (3) of section 74 are envisaged to cover separate periods. 12. In that view of the matter, the respondents are wholly incorrect in issuing a fresh show-cause notice for the same period of July 2017 to 20.02.2018, which notice was already issued under sub-section (1) of section 74 of the Act purportedly under exercising powers to suggest that once a notice has been issued under sub-section (1) of section 74 of the Act, if the authorities find that the liability of tax, interest or penalty larger than one indicated in the statement referred to in sub-section (1) is likely to arise, the competent authority is remedy-less. However, his remedy does not lie in issuing second notice under sub-section (3) of section 74 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chment shall cease to have effect after the expiry of a period of one year from the date of which such order has been made. Similar provisions contained in the VAT Act concerning provisional attachment came up for consideration before Division Bench of this Court in case of Automark Industries (I) Ltd v. State of Gujarat reported in 2014 SCC Online Gujarat 14217. The Court made following observations: "8. Section 45 of the VAT Act empowers the Commissioner during pendency of any proceedings of assessment or reassessment of turnover escaping assessment, to attach provisionally any property belonging to any dealer, if he is of the opinion that for the purpose of protecting the interest of Government revenue, it is necessary to do so. As per subsection (2) of Section 45, every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under subsection (1). Few things emerge from these statutory provisions. Firstly, the power of provisional attachment is in the nature of an extraordinary measure available to the revenue authorities for the purpose of protecting interest of Government revenue. Even before any assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing exercise of such discretion, the Court would not ordinarily interfere in such orders. However, when the nature of power is drastic, the Court's scrutiny in the sufficiency of reasons would necessarily be more incisive. 13. The respondents have raised three fold objections, such objections are yet to be gone into. The petitioner's opposition to the points raised by the Department would require a detailed scrutiny and examination of materials not fully before us. In any case, we do not intend to bypass the assessment proceedings. Suffice it to say that at this stage to pass an order of provisional attachment would neither be permissible nor be proper. To reiterate, when the petitioner's classification on the basis of which the tax has so far been collected, cannot be stated to be without any basis nor can it be stated that the petitioner has no prima facie case, and when the assessment proceedings are yet to be completed, resorting to such extreme power of attachment without anything further to suggest that the liability if ultimately finalized, the petitioner will not pay, would simply not be permissible. It is not the case of the Department placed before us throug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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