Tvl. Maxtile AAC Block Vs State Tax Officer (Madras High Court)
Introduction: In a significant ruling, the Madras High Court addressed the legality of provisional property attachment under Section 83 of the CGST Act, 2017. This article explores the court’s decision in the case of TVL Maxtile AAC Block Vs State Tax Officer, shedding light on key aspects regarding tax demand and recovery procedures.
Background:
We are aware of the Section 83 of the CGST Act,2017 pertaining to the provisional attachment of the property, where as a procedure of demand and recovery, the authorities initiates the provisional attachment of property to avoid evasion of tax by the taxpayer. In the present case, the Madras High Court held one of the important aspects regarding the attachment of the property.
Facts of the Case:
1. The Demand order had been issued in favour of the taxpayer for mismatch of ITC declared in GSTR-3B vs amount reflecting in GSTR-2A. Upon issuance of the Order, the tax authorities had to stay the proceedings in relation with the provisional attachment of property for the span of 3 months until the tax payer files an appeal. In contrary, if the appeal is not filed then the proceedings must be initiated.
2. In the present case, the provisional attachment was made on 22.08.2023 when the last date for filing the appeal was 30.08.2023. Whereas, the Appeal had been filed by the taxpayer by paying the pre-deposit of 10% on 24.08.2023 . Hence, the Taxpayer approached the Madras High Court for the violation of the provisions and improper attachment of the property.
3. It was held by the High Court that, “Such attachment is contrary to the statutory prescription and cannot be sustained” and remanded back to the authorities to stay the proceedings.
Conclusion: The Madras High Court, in its judgment, declared the provisional attachment of immovable properties as contrary to statutory provisions. It directed the release of the attachment and removal of related entries from encumbrance certificates. This decision sets a precedent for adherence to prescribed procedures in tax-related matters.
