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TMI Blog2020 (9) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... e; (C) Pending admission hearing and till final disposal of the present petition, Your Lordship may be pleased to suspend operation, execution and implementation of the order of provisional attachment said to have been issued by Respondent No.2 for attachment of above mentioned Bank Accounts of the Petitioners maintained with Respondent No.4 to 6 to permit the Petitioners to operate the said Accounts, in the interest of justice: (D) Your Lordship may be pleased to pass such other and/or further orders as may be deemed fit, just and proper in the interest of justice." 2. It is the case of the petitioners that the bank accounts of the petitioners have been provisionally attached under section 83 of the Gujarat Goods and Service Tax Act, 2017 (for short "GGST Act") without considering the provisions of section 83 of the GGST Act, as in the case of the petitioners no proceedings are pending under any of the sections mentioned therein. 3. Brief facts of the case are as under : 3.1) Petitioner no.2 is a proprietor of petitioner no.1 firm. It is the case of the petitioners that respondents no. 1 to 3 have attached the following bank accounts of the petitioners maintained with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate entities where he is director and shareholders are under investigation by respondent no.3 with respect to violation of provisions of the GGST Act under the allegation of creating fake turnover. It is the case of the petitioners that Mr. Sandip Chaniyara is in no way connected with the business of petitioner no.1 either directly or indirectly as an owner or as a beneficial owner and therefore, no illegality can be alleged against the petitioners who are otherwise legal entity in the eye of law and therefore, the orders of provisional attachment are bad in law. 4. Learned advocate Mr Rashesh Parikh for the petitioners submitted that respondent no.3Commissioner of State Tax has failed to form an opinion that is necessary to pass the order of provisional attachment for the purpose of protecting the interest of the Government Revenue. It was submitted that respondent no.3 has failed to consider whether the petitioners would be able to pay the tax dues after completion of the assessment proceedings inasmuch as it is not the case of the respondent authorities that the petitioners are a fly by night operators or they do not have the means to pay the dues that may result at the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic civil consequences on the business of the petitioner no.1 and further provisionally attaching the bank accounts of the petitioners with respondents no. 4 to 6 are contrary to the provisions of section 83 of the GGST Act. It was further pointed out that the impugned orders are also vitiated as respondent no.2 has failed to serve copy of the said order upon the petitioners and as such respondent no.2 failing to serve the copy of the orders results into the impugned action being void as it violates the principles of natural justice. 4.5) Learned advocate for the petitioners relied upon the following decisions in support of his submissions : i) Kaish Impex Private Limited (Through its Director - Deep Kumar Goyal) v. Union of India, through the Secretary and others reported in 2020 SCC OnLine Bom 125, wherein the Bombay High Court in similar circumstances has held as under : "18. The analysis of section 83 of the Act will show that such interpretation is not permissible and not contemplated by the legislature. Section 83 read with Rule 159(1), and the form GST DRC22, lay down a scheme as to how provisional attachment in certain cases is to be levied. Section 83 though uses the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of power with the Authorities to provisional attach the bank account of the Petitioner in the facts. 23. The Petition succeeds. Rule is made absolute in terms of prayer clause Para 21(i), (ii) and (iii) of the provisional attachment on the bank account specified in the prayers clause stands lifted. The concerned bank authorities will act upon the same. All parties to act on the authenticated copy of the order." ii) Pranit Hem Desai v. Additional Director General, DGGI reported in 2910 (30) G.S.T.L. 396(Guj), wherein this Court has held as under : "28. Section 83 of the State GST Act empowers the Assessing Authority to make a provisional attachment of any property of the assessee during the pendency of any proceeding for the assessment or reassessment of any turnover, even though there is no demand outstanding against the assessee, if he is of the opinion that it is necessary to do so to protect the interest of the revenue. This provision has been made, in our opinion, in order to protect the interest of the revenue in cases where the raising of demand is likely to take time because of the investigations and there is apprehension that the assessee may default the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bank accounts and trading assets should be resorted to only as a last resort because, the attachment of the bank accounts of the assessee would paralyse the functions and business of the assessee. The Authority, therefore, should exercise the power conferred upon him under Section 83 of the Act with circumspection and fairly and reasonably. No hard and fast rule can be laid down as to how and under what circumstances the power under Section 83 can be invoked by the Authority. The discretion conferred on the Authority shall be brought to bear having regard to the facts and circumstances of each case. It is not permissible for the Authority to equate the provisional attachment envisaged under Section 83 of the Act with attachment in the course of the recovery proceedings." 5. On the other hand, learned Assistant Government Pleader Mr. Soaham Joshi for the respondents no. 1 to 3 submitted that the petitioner no.1 issued various E-Way bills over a short span of time with different entities namely, Chaniyara ECommerce situated at Jamnagar, Solani Brothers situated at Jamnagar and other such entities, which according to the opinion of the respondent authorities are involved in bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts made in the affidavit in reply filed on behalf of respondent no.2 : "8. In this regard the attention of this Hon'ble Court is drawn to the provisions of Section 83 of the Goods and Services Tax Act, 2017 wherein during the pendency of any proceedings in the interest of Government Revenue the respondent authorities are empowered to attach the bank account of the petitioner. It is pertinent to note here that a search proceedings under Section 67 of the Act came to be initiated by the respondent authorities at the residential premises of the petitioner and in this regard a statement of the petitioner came to be recorded under Section 67(2) of the Act. If the said statement is perused, it would be clear that the petitioner has stated that the bank accounts that are being attached by the respondent authorities are not belonging to the petitioner and the petitioner has no interest whatsoever in the operation or maintenance of the said bank accounts. A copy of the statement dated 27.08.2019 is annexed hereto and marked as AnnexureR3. 9. In this regard as the respondent authorities realized that the petitioner is involved in issuing of doubtful and fictitious E-way bills, summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subjective satisfaction should be based on some credible materials or information and also should be supported by supervening factor. It is not any and every material, howsoever vague and indefinite or distant remote or far fetching, which would warrant the formation of the belief. [2] The power conferred upon the authority under Section 83 of the Act for provisional attachment could be termed as a very drastic and far reaching power. Such power should be used sparingly and only on substantive weighty grounds and reasons. [3] The power of provisional attachment under Section 83 of the Act should be exercised by the authority 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. [4] The power under Section 83 of the Act for provisional attachment should be exercised only if there is sufficient mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the assessment proceedings. It is also not in dispute that as per the returns filed by the petitioner no.1, there is an outward supply of Rs. 10,68,24,458/and generation of E-Way bill amounting to Rs. 8,44,26,683/of which the petitioner no.2 has no knowledge. Petitioner no.2 has also replied to question no.17 in his statement that he is not aware about email ID used for the purpose of obtaining GST number. Petitioner no.2 has raised his hands in ignorance with regard to the benefits received by him out of the transactions carried out in the account of petitioner no.1. Petitioner no.2 has also stated that the entire transactions were carried out by one Sandipbhai Maganbhai Chaniyara and petitioner no.2 was not aware about such transactions. In such circumstances, it cannot be said that the respondent authorities have no reason to form an opinion as required by section 83 of the GGST Act for passing the impugned order of provisional attachment. 9. Section 83 of the GGST Act reads as under : "83 Provisional attachment to protect revenue in certain cases : (1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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