M/s PATRAN STEEL ROLLING MILL Versus ASSISTANT COMMISSIONER OF STATE TAX, UNIT 2
GST
2018 (12) TMI 1441 – GUJARAT HIGH COURT – 2019 (20) G. S. T. L. 732 (Guj.) , [2019] 65 G S.T.R. 177 (Guj)
GUJARAT HIGH COURT – HC
Dated:- 20-12-2018
R/SPECIAL CIVIL APPLICATION NO. 16931 of 2018
GST
MS HARSHA DEVANI AND MR A. P. THAKER, JJ.
For The Petitioner : MR D K TRIVEDI (5283)
For The Respondents : MR UTKARSH SHARMA, ASSTT. GOVT. PLEADER
ORAL JUDGMENT
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner seeks the following substantive reliefs:
“[C] Your Lordships may be pleased to issue writ of mandamus or any other appropriate writ directing the respondent authorities to immediately remove attachment of bank accounts of (1) Axis Bank, Bhavnagar, viz., Nos. (a) C/C A/c No.917030053366001, (b) CURRENT A/c No.917020055857122 and (c) Savings A/c No.200010100069386 of Mr. Manish Bansal, (
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of the petitioner company. During the course of such visit, he carried out comparison of the physical stocks of raw material and finished goods with recorded the quantity of the same and found that there was a stock difference, inasmuch as physical goods valued at Rs. 51,73,633/- were found in excess in the factory premises when compared to the recorded quantity. It appears that the first respondent also carried out investigation at the end of a transporter, according to whom, the petitioner had supplied and received goods without payment of tax and therefore, the tax was payable. It is the case of the petitioner that under pressure, threat and duress, the first respondent obtained a statement of the proprietor of the petitioner firm and further pressurized the petitioner to deposit Rs. 17,00,000/-. The respondents also claimed that a total of Rs. 55,37,237/- was payable by the petitioner and obtained post-dated cheques of the differential amount from the petitioner under pressure, th
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orities to release its bank accounts; however, to no avail. It is the case of the petitioner that on account of seizure of its goods as well as attachment of the bank accounts, the petitioner is not in a position to carry on its day to day business and make payment of statutory dues like GST, income tax, local taxes, etc. It is in these circumstances, that the petitioner has approached this court seeking the reliefs noted above.
3. Mr. D. K. Trivedi, learned advocate for the petitioner submitted that the provisional attachment in this case has been made under section 83 of the Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as “the GGST Act”). It was submitted that sub-section (1) of section 83 of the GGST Act provides that where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it i
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achment. It was submitted that even if the case of the respondents is taken at face value, at best, the tax liability of the petitioner would come to Rs. 13,84,000/- and therefore, the amount of Rs. 17,00,000/- deposited by the petitioner should be sufficient to protect the interests of the revenue. It was, accordingly, urged that therefore, the attachment of the bank accounts is required to be removed and the goods seized by the respondents are required to be released.
4. On the other hand, Mr. Utkarsh Sharma, learned Assistant Government Pleader, placed reliance upon the averments made in the affidavit-in-reply filed on behalf of the respondents. A perusal of the averments made in the affidavitin- reply shows that the respondents have mainly relied upon the admissions made by the petitioner on the day of the search, despite the fact that the statement was subsequently retracted by the proprietor of the petitioner firm.
5. A perusal of the computation of tax as made by the first res
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nalty having been imposed, in the opinion of this court, the respondent authorities were not justified in resorting to such a drastic coercive measure of attachment of the bank accounts and seizure of goods, which results in bringing the business of the petitioner to a grinding halt.
7. Sub-section (1) of section 83 of the GGST Act provides that where the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person. On a plain reading of the said provision, it is evident that before resorting to such drastic action, the Commissioner is required to form an opinion that it is necessary to do so to protect the interest of the revenue. For the purpose of arriving at such an opinion, the Commissioner should first form an opinion that the petitioner would not be in a position to pay the tax dues after th
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17,00,000/- during the course of the search proceedings shall not be construed as an admission of such dues on the part of the petitioner.
8. Before parting, the court deems it fit to caution the concerned authorities that while exercising powers under section 83 of The GGST Act, the authorities should try to balance the interest of the Government revenue as well as a dealer to ensure that while the interest of the revenue is safeguarded, the dealer is also in a position to continue with his business, because it is only if the dealer continues with the business that he would generate more revenue. The authorities should keep in mind that bringing the business of a dealer to a halt does not in any manner serve the interest of the revenue. Therefore, while taking action under section 83 or 67(2) of the GGST Act, the concerned authorities should take care to ensure that equities are maintained and while securing the interest of the revenue, they should attempt to see that the dealer is i
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