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TMI Blog2024 (7) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has been issued. The respondents have prima facie been able to explain the circumstances under which such provisional orders of attachment had been necessitated, inasmuch as, the notices under Section 74 of the said Act, could not be served on the petitioner. At this stage it cannot be ruled out that the petitioner was avoiding service of notice. Although, the order of provisional attachment appears to be drastic, there is no embargo on exercise of power. The present case does not suggest that the petitioner has in anyway been harassed or any of the rights of the petitioner, as enshrined in the constitutional provisions has been infringed, especially when the petitioner did not apply for release of the property, by filing an objection in terms of the Rule 159 (5) of the said Rules. Prima facie there appears to be sufficient material for the respondents to pass fresh provisional orders of attachment to protect the interest of revenue. Even after the fresh orders of attachment dated 9th February, 2024 under Section 83 of the said Act had been passed, no steps had been taken by the petitioner to object to the continuance of such orders in the manner provided for in the statute. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation initiated by the respondents that the aforesaid provisional orders of attachment had been issued, on the premise that the petitioner is in control of certain separate entities, despite the fact that the petitioner has no connection with such entities. 4. In support of his aforesaid contention that the provisional orders of attachment cannot be continued beyond the period of one year, he has placed reliance on an unreported judgment delivered by the Hon ble High Court at New Delhi in the case of M/s. VKS Industries v. Commissioner, Central Excise and CGST in WP(C) 257 of 2023 on 13th February, 2023. It is submitted that the provisional orders of attachment issued under Section 83 of the said Act is akin to an attachment order passed under Order XXXVIII Rule 5 of the Code of Civil Procedure and the principles of Order XXXVIII Rule 5 of the Code of Civil Procedure 1908 squarely applies in respect of the orders of attachment passed under Section 83 of the said Act. Admittedly, there being no determination of liability by initiating any proceeding against the petitioner, such orders of attachment are otherwise bad in law. Simply because the respondents have reasons to believe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation would go to demonstrate that the aforesaid exercise of the jurisdiction by the respondents is in colourable exercise of power. In the facts, as stated hereinabove, he submits that the orders of attachment should be quashed. 8. Mr. Banerjee, learned advocate representing the respondent DGGI, on the other hand submits that in course of a search and seizure operation, the names of the entities, whose names are appearing in the provisional orders of attachment dated 10th February, 2023, had surfaced and in course of investigation since, it has come to the light that the petitioner is in control of all the aforesaid entities the respondents to protect the interest of the revenue had issued the aforesaid provisional orders of attachment. 9. Mr. Banerjee, by placing before this Court, photocopies of a series of postal envelopes, submits that despite taking steps, the department could not cause service of show cause notices under Section 74 of the said Act, on the petitioner until the time mentioned hereinafter. From the endorsement made by the postal authorities, on the envelopes as would appear from the copies thereof, it would transpire that the postal envelopes had been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the drastic nature of the order confers a right on the person whose property is attached to file an objection under Rule 159 (5) of the said Rules. The guidelines for provisional order of attachment of property under Section 83 of the said Act, dated 23rd February, 2021 disclosed by the petitioner also recognize right of the person whose property has been attached to file an objection. Once, an objection is filed, it is for the Commissioner to consider whether or not such order of attachment is required to be continued or not. Admittedly, in this case, no such objection has been filed. The petitioner, however, questions the order of attachment on the ground that in terms of Section 83 (2) of the said Act, the order of attachment cannot be permitted to continue and shall cease to have effect, after one year from the date of the order. 14. Mr. Bag, learned advocate representing the petitioner also questions the manner in which the orders of attachment had been issued. Inasmuch as, according to him, the respondents without determining the liability on the petitioner cannot be permitted to issue the orders of attachment. He further submits that in the instant case, no proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice, which prompted them to issue fresh provisional orders of attachment. 18. I may note here, that although, a lot of stress has been laid by the petitioner to, inter alia, contend that the orders of attachment cannot be continued for more than a year, in this case, I find that fresh provisional orders of attachment has been issued. The respondents have prima facie been able to explain the circumstances under which such provisional orders of attachment had been necessitated, inasmuch as, the notices under Section 74 of the said Act, could not be served on the petitioner. At this stage it cannot be ruled out that the petitioner was avoiding service of notice. The petitioner cannot be permitted to take advantage of its own wrong and cannot be permitted to avoid service of show cause notices on one hand and on the other to hold out that the provisional order of attachment cannot continue for a period, in excess of one year or that no fresh order of attachment can be issued or that the entire proceeding stands vitiated on such ground. The judgment cited by Mr. Bag, delivered by the Hon ble High Court of Gujarat in Valerius Industries (supra) and Meenakshi Trendz (supra) are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. (6) The attachment of bank account and trading assets should be resorted to only as a last resort or measure. The provisional attachment under section 83 of the Act should not be equated with the attachment in the course of the recovery proceedings. (7) The authority before exercising power under section 83 of the Act for provisional attachment should take into consideration two things: (i) whether it is a revenue neutral situation (ii) the statement of output liability or input credit . Having regard to the amount paid by reversing the input tax credit if the interest of the revenue is sufficiently secured, then the authority may not be justified in invoking its power under section 83 of the Act for the purpose of provisional attachment. 19. From the aforesaid, although, the order of provisional attachment appears to be drastic, there is no embargo on exercise of power. The present case does not suggest that the petitioner has in anyway been harassed or any of the rights of the petitioner, as enshrined in the constitutional provisions has been infringed, especially when the petitioner did not apply for release of the property, by filing an objection in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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