Case Law Details
Patran Steel Rolling Mill Vs Assistant Commissioner of State Tax (Gujarat High Court)
Satisfaction to be Recorded before passing order of attachment of Assets under GST
Facts- The Assessee company is engaged in manufacturing & supplying TMT bars and paid GST on the same. The Revenue visited the Assessee’s factory & compared stock of raw material & finished goods with recorded quantity of the same. Investigation at the end of the transporters revealed that the Assessee supplied & received goods without payment of tax. The Assessee was also compelled to give postdated cheques towards payment. Later the Revenue passed an order of attachment against the stock found to be in excess. Several bank accounts operated by the Assessee & its executives were also attached -The Assessee claimed that the attachment of the bank accounts had crippled the day-to-day activities of the Assessee & was impeding upon its ability to pay taxes . Hence the present writ.
The Hon’ble High Court held that As per mandate of Section 83(1) of the GGST Act, the Commr. must record written reasons before attaching any property or bank accounts or taking any such drastic action. Besides, the Commr. must record satisfaction that such action was justified so as to protect the Revenue’s interests. In the present case, the Commr. recorded no such satisfaction. Hence no opinion could be formed to validate the provisional attachment of property. Hence the attachment order is unsustainable. Besides, the sum already deposited by the Assessee need not be construed as admission of dues on its part. Before exercising powers u/s 83 of the GGST Act, the Revenue must balance the interest of the Revenue with those of the assessee, so as to ensure that while the Revenue’s interests are safeguarded, the functioning of the Assessee does not get crippled. Drastic action u/s 83 of the Act is justified if the assessee is a fly-by-night operator or habitual offender, which is not the case here. Powers under this provision must be exercised after due application of mind. Hence the attachment of the bank accounts is directed to be lifted.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
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