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TMI Blog2019 (9) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner. Whether such power conferred upon the Commissioner by the legislature could have been delegated to the three subordinate officers referred to above by virtue of the order dated 15th January 2018 passed in exercise of power under subsection (3) of Section 5 read with clause 19 of Section 2 of the Act and the rules framed thereunder. In our opinion, the answer has to be in the negative. Although there is no specific challenge to the order dated 15th January 2015 passed by the Commissioner of State Tax delegating his power under Section 83 to the subordinate officers, yet, we are of the view that by virtue of such order, such impugned order of provisional attachment cannot be defended. In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law. Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probably cause. Any use of discretionary power exercised fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1 Rule returnable forthwith. Ms. Maithili Mehta, the learned Assistant Government Pleader waives service of notice of rule for and on behalf of the respondents. 2 By this writ application under Article 226 of the Constitution of India, the writ applicant - a partnership has prayed for the following reliefs: "(A) Your Lordships may kindly be pleased to issue a writ of certiorari or an appropriate writ, orders, directions and thereby be pleased to quash and set aside the order dated 17.06.2019, passed by the respondent No.4 - Commercial Tax Officer at Vadodara, Gujarat in reference No.ZA2406190010233 whereby the petitioner is demanded to pay the total amount of ₹ 1,60,79,302/-; (B) Your Lordships may kindly be pleased to issue a writ of certiorari or an appropriate writ, orders, directions and thereby be pleased to quash and set aside the orders of provisional attachment of the stock of goods, amounting ₹ 1,60,00,000/- dated 27.11.2018 and the orders of provisional attachment of the petitioner's current account bearing A/C No. 01880200001055 and FD/RD CC A/c No.01880500000081, registered at Bank of Baroda, Alkapuri Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the firm to perform and act all the legal representation, who is the national and citizen of India and hence he is entitled to the fundamental and civil rights guaranteed under the Constitution of India. 2.2 The petitioner respectfully states that the petitioner firm is engaged in the business of purchasing and selling the material of copper whereby the scrap material of copper is purchased by the firm and the same is being melted and converted into the copper pipes before selling it into the market. The petitioner firm is registered with the GST department with GSTIN No. 24AANFV4191NIZH. 2.3. The petitioner respectfully states that according to the business practice, the petitioner firm has purchased the copper scrap material from the Various firms/companies, which is volumed as 291538.38 kilograms, amounting ₹ 15,51,00,399/- in the tax year of 201718. That out of the said amount of volume, the following limited amount of material was purchased from the below mentioned firm: Name of the firm /company Amount of volume (In Rs.) Central and State GST Adideva Enterprize 64,88,624/- 11,67,954/- Laxmiraj Enterprize 1,42,84,362/- 25,71,183/- Radhesh Traders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018. However, he was not allowed to explain to aforementioned transaction of sales and purchases and the credit of GST tax into the account of aforestated 4 firms. Further it was also instructed by the authority that the petitioner will receive the showcause notice from the department as an opportunity of explanation and they are concerned with the statement presently. 2.9. That on 13.02.2019, the present legal representative partner of the firm has received the email on his mail id i.e. [email protected] from mail id [email protected], wherein it was mentioned that the input tax credit amounting to ₹ 30,55,680/- has been blocked. That though the present partner had issued the email, questioning existence of the order as no order was served to him either personally or on his email, the same request is disrespected and kept unheard till today." 5 Mr. Deven Parikh, the learned senior counsel appearing for the writ applicant vehemently submitted that the order of provisional attachment of property under Section 83 of the GST Act, 2017 is without jurisdiction and not tenable in law. Mr. Parikh submitted that the power to order provisional attachment with a view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the statute to : (1) Deputy Commissioner (2) Assistant Commissioner and (3) State Tax Officer. In view of such order delegating the power, the State Tax Officer could be said to be empowered to pass the impugned order of provisional attachment of property under Section 83 of the Act. According to Ms. Mehta, it cannot be argued that the impugned order of provisional attachment passed by the State Tax Officer is without jurisdiction. Ms. Mehta further submitted that in the same manner, the State Tax Officer could be said to have been empowered to order provisional attachment of the bank accounts also. 7 Ms. Mehta placed strong reliance on the following averments made in the affidavit-in-reply filed on behalf of the respondent No.3 duly affirmed by one Devendrakumar Dahyabhai Chauhan, State Tax Officer 1, Unit 6, Vadodara: "6 It is submitted that, raid was carried on the premises of the present petitioner being & factory premises on 20.11.2018 thereafter, on 20.11.2018 during the raid it was found that the petitioner herein had entered into bogus billing transaction/only papers trails from four enterprises namely Adideva Enterprise, Laxmiraj Enterprise, Raghav Traders, Radhesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing transactions was done, the petitioner herein was not in a position to answer affirmatively and therefore, there is subjective satisfaction on behalf of the respondent authorities to believe that the said transaction was fictitious transactions and with an intention to evade payment of tax as well as with an intention to fraudulently avail Input Tax Credit. Annexed herewith and marked as ANNEXUREII is the copy of the statement dated 18.12.2018. It is further respectfully submitted that, one dealer namely Mr. Sunny Pravinchand Nagar Statement was recorded on 20.03.2019, since stated that he has incorporated/registered fourteen fictitious entities/dealers and the present petitioner namely Valerius Industries is also part of the said fourteen fictitious entities/dealers. Annexed herewith and marked as AnnexureRIII is the copy of such statement dated 23.01.2019. 10 It is respectfully submitted that, the bank account was provisionally attached under rule 159(1) of the GGST/CGST rule, on 20.11.2018 and the ITC Input Tax Credit was blocked on 11.02.2019 under section 17 (5) of the GGST/CGST Act. Annexed herewith and marked as ANNEXURERIV is the copy of the letter dated 11.02.2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r furnishing of the annual return for the financial year to which the tax not paid relates: Provided that no such assessment order shall be passed without giving the person an opportunity of being heard." 11 Section 64 of the Act, 2017 reads as follows: "64. Summary assessment in certain special cases. (1) The proper officer may, on any evidence showing a tax liability of a person coming to his notice, with the previous permission of Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue: Provided that where the taxable person to whom the liability pertains is not ascertainable and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and liable to pay tax and any other amount due under this section. (2) On an application made by the taxable person within thirty days from the date of receipt of order passed under subsection (1) or on his own motion, if the Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice. (4) The officer authorised under subsection (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. (5) The person from whose custody any documents are seized under subsection (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation. (6) The goods so seized under subsection (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier." 13 Section 73 of the Act, 2017 reads as follows: "73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful misstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under subsection (1) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund. (11) Notwithstanding anything contained in subsection (6) or subsection (8), penalty under subsection (9) shall be payable where any amount of selfassessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax." 14 Section 74 of the Act, 2017 reads as follows: "74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts. (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under subsection (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under subsection (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. Explanation 1.- For the purposes of section 73 and this section, ( i) the expression "all proceedings in respect of the said notice" shall not include proceedings under section 132; (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 83 It is to inform that M/s. Valerius Industries, having principal place of business at 26/1 GIDC Industrial Estate bearing registration number as 24AANFV4191N12H (GSTIN/ID), PAN: AANFV4191N is a registered taxable person under the Gujarat Goods and Services Tax Act 2017 & Central Goods and Services tax Act 2017. Proceedings have been launched against the aforesaid taxable person under section 67 of the said Act to determine the tax or any other amount due from the said person. As per information available with the department, it has come to my notice that the said person has Current Account No 01880200001055 FD RD & CC Account No.01880500000081 account in your bank. In order to protect the interests of revenue and in exercise of the powers conferred under section 83 of the Act, R R Bhatiya, State Tax Officer 1, Unit44, Vadodara, hereby provisionally attach the aforesaid account / property. No debit shall be allowed to be made from the said account or any other account operated by the aforesaid person on the same PAN without the prior permission of this department. The property mentioned above shall not be allowed to be disposed of without the prior permission of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functions to be performed under this Act by a proper officer as defined in clause (91) of section 2 under different sections of the said Act mentioned in the entry in column (2) of the Schedule below and described in the corresponding entry at column (3) of the said Schedule to the Proper Officers specified in the corresponding entry in column (4) thereof, subject to the condition that the functions hereby assigned shall be performed only within their jurisdiction unless specific jurisdiction is mentioned there against. SCHEDULE - A SI No. Section Functions assigned Designation of proper officer '(1) '(2) '(3) '(4) 1 83 Provisional attachment to protect revenue in certain cases Deputy Commissioner, Assistant Commissioner, State Tax Officer Sd/- (P D Vaghela) Commissioner of State Tax Gujarat State, Ahmedabad." 20 The first and the foremost question that needs to be answered is whether the Commissioner could have delegated his power by virtue of the aforesaid order. Ms. Mehta, the learned A.G.P. seeks to rely upon Section 5 of the Act, 2017. Section 5 of the State GST Act reads as under: "5. Powers of Officers (1) Subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the State tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions. 25 Ms. Mehta submitted that by virtue of the aforesaid provisions of the State GST Act, the Commissioner State Tax could be said to be empowered to delegate his powers of provisional attachment under Section 83 of the State GST Act. 26 At this stage, it is necessary to look into few provisions of the Central GST Act, 2017. Section 2(24) of the CGST Act, 2017 defines "Commissioner" as under: ""Commissioner" means the Commissioner of State tax appointed under section 3 and includes the Chief Commissioner or Principal Commissioner of State tax appointed under section 3;" 27 Section 2(25) of the CGST Act defines "Commissioner in the Board" as under: "2(25) "Commissioner in the Board" means the Commissioner referred to in section 168;" 28 Section 83 of the CGST Act is pari materia to Section 83 of the State GST Act. Section 167 of the CGST Act with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of the State Tax delegating his power of Section 83 to the subordinate officers on the ground that the same is without jurisdiction. However, it appears that so far as the State GST Act is concerned, the Commissioner, in Section 5(3) of the Act, would be the Commissioner of the State Tax and in the same manner, the Commissioner, in Sections 167 and 168 of the Act respectively, shall also be the Commissioner of the State Tax. 31 Delegation is the act of making or commissioning a delegate. It generally means parting of powers by the person who grants the delegation and conferring of an authority to do things which otherwise that person would have to do himself. Delegation is defined in Black's Law Dictionary as "the act of entrusting another with authority by the empowering another to act as an agent or representative". In P. Ramanatha Aiyar's, The Law Lexicon, "delegation is the act of making or commissioning a delegate. Delegation generally means parting of powers by the person who grants the delegation, but it also means conferring of an authority to do things which otherwise that person would have to do himself". Justice Mathew in Gwalior Rayon Silk Manufacturing (Wvg.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e construction that would best achieve the purpose and object of the statute should be adopted." 33 At this stage, in the aforesaid context, we may deal with the submission canvassed by Ms. Mehta that in the case on hand, the order of provisional attachment under Section 83 of the Act came to be passed because of the pendency of proceedings under Section 67 of the Act. The submission of Ms. Mehta is that Section 67 of the Act confers power of inspection, search and seizure. Where the proper officer not below the rank of Joint Commissioner has reasons to believe that a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has indulged in contravention of any of the provisions of the Act or the rules made thereunder to evade tax under the Act 2017, then such proper officer not below the rank of Joint Commissioner may authorize in writing any other officer of the State Tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. According Ms. Mehta, if, ultimately, the entire exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of the Commissioner to delegate his power of provisional attachment under Section 83 of the Act upon the three subordinate officers by virtue of subsection (3) of Section 5 read with clause 91 of Section 2 of the Act, 2017. Section 83 talks about the opinion which is necessary to be formed for the purpose of protecting the interest of the government revenue. Any opinion of the authority to be formed is not subject to objective test. The language leaves no room for the relevance of an official examination as to the sufficiency of the ground on which the authority may act in forming its opinion. But, at the same time, there must be material based on which alone the authority could form its opinion that it has become necessary to order provisional attachment of the goods or the bank account to protect the interest of the government revenue. The existence of relevant material is a precondition to the formation of opinion. The use of the word "may" indicates not only the discretion, but an obligation to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue. Therefore, the opinion to be formed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 3 (1) of the Prevention of Corruption Act, 1988 which conferred the discretion upon the State Government to appoint as many Special Judges as may be necessary for such area or areas or for such case or group of cases to try the offences punishable under the Act, observed : "The legislature had to leave it to the discretion of the Government as it would be in a better position to know the requirement. Further, the discretion conferred upon the Government is not absolute. It is in "The nature of a statutory obligation or duty. It is the requirement which would necessitate exercise of power by the Government. When a necessity would arise and of what type being uncertain the legislature could not have laid down any other guideline except the guidance of "necessity". It is really for that reason that the legislature while conferring discretion upon the Government has provided that the Government shall appoint as many Special Judges as may be necessary. The words "as may be necessary" in our opinion is the guideline according to which the Government has to exercise its discretion to achieve the object of speedy trial. The term "necessary" means what is indispensable, needful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through an investigation. But the expression "circumstances suggesting" cannot support the construction that even the existence of circumstances is a matter of subjective opinion. That expression points out that there must exist circumstances from which the Authority forms an opinion that they are suggestive of the crucial matters set out in the three subclauses. It is hard to contemplate that the legislature could have left to the subjective process both the formation of opinion and also the existence of circumstances on which it is to be founded. It is also not reasonable to say that the clause permitted the Authority to say that it has formed the opinion on circumstances which in its opinion exist and which in its opinion suggest an intent to defraud or a fraudulent or unlawful purpose. It is equally unreasonable to think that the legislature could have abandoned even the small safeguard of requiring the opinion to be founded on existent circumstances which suggest the things for which an investigation can be ordered and left the opinion and even the existence of circumstances from which it is to be formed to a subjective process. These analysis finds support in Gower's Mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief relating to the escapement of the income of the assessee from assessment. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. 41 In Bhikhubhai Vithalabhai Patel (supra), the Supreme Court observed in paras 32 and 33 as under: "32. We are of the view that the construction placed on the expression "reason to believe" will equally be applicable to the expression "is of opinion" employed in the proviso to Section 17 (1) (a) (ii) of the Act. The expression "is of opinion", that substantial modifications in the draft development plan and regulations, "are necessary", in our considered opinion, does not confer any unlimited discretion on the Government. The discretion, if any, conferred upon the State Government to make substantial modifications in the draft development plan is not unfettered. There is nothing like absolute or unfettered discretion and at any rate in the case of statutory powers. The basic principles in this regard are clearly expressed and explained by Prof. Sir William Wade in Administrative Law (Ninth Edn.) in the chapter entitled 'abuse of discretion' and under the general heading the principle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve rational connection or relevant bearing to the formation of such opinion and are not extraneous to the purposes of the statute." 42 In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law. Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probably cause. Any use of discretionary power exercised for an unauthorized purpose amounts to malice in law. It is immaterial whether the authority acted in good faith or bad faith. In the aforesaid context, we may refer to and rely upon a decision of the Supreme Court in the case of Smt. S.R. Venkatraman vs. Union of India reported in (1979) ILLJ 25(SC) where it had been held: "There will be an error of fact when a public body is prompted by a mistaken belief in the existence of a nonexisting fact or circumstances. This is so clearly unreasonable that what is done under such a mistaken belief might almost be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods worth only ₹ 1,60,00,000/- from the total goods worth ₹ 2,48,59,485/-( Rupees Two Crore Forty Eight Lakh Fifty Nine Thousand Four Hundred Eighty Five only). 44 We would like to add something more to what we have stated above. It would be a big mistake on the part of the respondents to understand that the reasons to believe necessary for the purpose of carrying out inspection, search and seizure under Section 67 of the Act, 2017 would be sufficient enough for the purpose of formation of the opinion that it is necessary to provisionally attach the goods or other articles for the purpose of protecting the interest of the government revenue. In our opinion, Section 83 of the Act stands altogether on a different footing. The considerations also are quite different for the purpose of exercising the power of provisional attachment under Section 83 of the Act. Just because, some proceedings are initiated under Section 67 by itself would not be sufficient to arrive at the satisfaction that it is necessary to provisionally attach the property for the purpose of protecting the interest of the government revenue. The power has been specifically conferred upon the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection (1), on the person chargeable with tax. (4) The service of statement under subsection (3) shall be deemed to be service of notice under subsection (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilfulmisstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under subsection (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder, or failure to furnish any information on being asked for, in writing, by the proper officer." 46 Thus, Section 74 provides for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement or suppression of fact. The case of the department is very specific. 47 Rule 142(5) of the Rules 2017 reads as under: "142. Miscellaneous transitional provisions. (5) Notwithstanding anything to the contrary contained in this Act, any amount of input tax credit reversed prior to the appointed day shall not be admissible as input tax credit under this Act." 48 It appears from the materials on record that without issue of any show cause notice, the tax liability came to be determined under Section 74 of the Act. Section 74 makes it abundantly clear that the defaulter should be called upon to show cause as to why he should not be paid the amount specified in the notice along with the interest payable thereon. There could not have been any assessment under Section 74 of the Act without giving any opportunity of hearing to the writ applicant. In such circumstances, the order is not ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) the Assessing Officer shall, by an order in writing, revoke such attachment. However where the Assessing Officer is satisfied that a guarantee from a scheduled bank for an amount lower than the fair market value of the property is sufficient to protect the interests of the revenue, he may accept such guarantee and revoke the attachment. (4) The Assessing Officer may, for the purposes of determining the value of the property provisionally attached under head (1 ), make a reference to the Valuation Officer referred to in the provision of the lncomeTax Act, 1961 who shall estimate the fair market value of the property in the manner provided under that provision and submit a report of the estimate to the Assessing Officer within a period of thirty days from the date of receipt of such reference. (5) An order revoking the provisional attachment under head (3) shall be made (a) within forty five days from the date of receipt of the guarantee, where a reference to the Valuation Officer has been made under head (4); or (b) within fifteen days from the date of receipt of guarantee in any other cases. (6) Where a notice of demand specifying a sum payable is served upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer only if there is a reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment. It should therefore be exercised with extreme care and caution. Moreover. power under this provision is to be exercised only if there is sufficient material on record to justify satisfaction that assessee is about to dispose of whole or any part of his property with a view to thwarting ultimate collection of demand and in order to achieve said objective attachment should be of properties and to extent it is required to achieve this object. It should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee. Attachment of bank accounts and trading assets should be resorted to only as a last resort. In any event, attachment under this provision should not be equated with attachment in the course of recovery proceedings. In the event the revenue is adequately protected by attachment, there is no justification for Assessing Officer for making an order of demand directing assessee to deposit e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment within time period prescribed under the provision of the IncomeTax Act, 1961 dealing with appealable orders along with a stay application, Assessing Officer cannot not pass an order of attachment in terms of this provision during pendency of said appeal. When property, which' is subject matter of provisional attachment, is sufficient to satisfy tax liability and safeguard interest of revenue, petitioner can seek release of provisional attachment in respect of other properties and amounts due from debtors and depositors." 51 Thus, although the provisions of Section 281B of the Income Tax Act is pari materia to Section 83 of the State GST Act, yet one pertinent feature of Section 281B of the Income Tax Act is that it gives guidelines for making the provisional attachment. Such guidelines are missing so far as Section 83 of the State GST Act is concerned. 52 Our final conclusions may be summarized as under: [1] The order of provisional attachment before the assessment order is made, may be justified if the assessing authority or any other authority empowered in law is of the opinion that it is necessary to protect the interest of revenue. However, the subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with law.
54 In such circumstances referred to above, this writ application succeeds and is hereby allowed. The assessment order dated 17th June 2019 passed by the respondent No.4 - Commercial Tax Officer at Vadodara demanding total amount of ₹ 1,60,79,302/- towards tax, penalty and interest is hereby quashed and set aside. However, it is clarified that if the authority wants to proceed against the writ applicant under Section 74 of the Act, then it shall be open for the authority to do so after issuing appropriate show cause notice and give an opportunity of hearing to the writ applicant.
55 The order of provisional attachment of the stock of goods amounting to ₹ 1,60,00,000/- dated 27th November 2018 as well as the order of provisional attachment of the writ applicant's current account bearing account No.01880200001055 and FD/RD CC account No.01880500000081 registered at the Bank of Baroda, Alkapuri Branch, Vadodara dated 20th November 2018 is hereby quashed and set aside. The blockage of input tax credit dated 13th February 2019 by way of computer entry is also held to be illegal and is ordered to be released forthwith. Rule is made absolute. X X X X Extracts X X X X X X X X Extracts X X X X
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