Case Law Details
Khushiya Industries (P.) Ltd. Vs State of Gujarat (High Court Gujarat)
1. These petitions are filed for challenging provisional orders of attachment passed by the respondent authorities attaching the petitioner’s factory premises, stock and bank accounts. The facts behind such action of the respondents are that the petitioner-a Private Limited Company is engaged in manufacture and trading in caster oil and related products. The premises of the petitioner and other entities in the same business were raided. During the period between 27.06.2018 and 07.07.2018, Revenue authorities collected several documents and recorded statements of responsible persons. On the basis of such materials, the case of the department is that the petitioner is engaged in large scale bogus billing activities. The petitioner is thereby defrauded the Revenue. The respondents roughly assessed the petitioner’s possible tax and penalty liabilities under the Gujarat Goods & Service Tax Act and Central Goods & Service Tax Act at close to Rs. 45 crores.
2. Counsel for the petitioner submitted that the petitioner has been in business since several years. In the past, no such allegation had been made. Statements of the director of the petitioner and other persons were recorded under duress. The petitioner has not indulged any bogus billing activity. The department has attached the petitioner’s bank accounts, premises and stock thereby making it impossible for the petitioner to operate its business. The goods attached are perishable in nature. On some reasonable conditions, attachment should be suspended.
3. On the other hand, learned AGP explained the modes operandi allegedly employed by the petitioner for defrauding the Government revenue. He submitted that there is reliable material on record to establish such allegation. Pending assessment, the competent authority passed the order of provisional attachment to protect the interest of the Revenue.
4. In facts of the case, we have to balance the interest of both sides. At the prima facie stage, the department contends strongly that the petitioner has indulged into revenue defalcation. Possible tax and penalty liabilities are substantial. At the same time, it is not disputed that the petitioner is also involved in legitimate business activities. By freezing the petitioner’s bank accounts and attaching the properties, the petitioner is temporarily rendered penalized. The petitioner cannot operate the business, cannot move the stock and cannot make payments. On reasonable terms, we propose to suspend the attachments.
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