Case Law Details
RELEVANT PARAGRAPH
19. It is true that attaching the properties of an assessee even before the crystlisation of the demand is a drastic step and has to be exercised only in extreme circumstances. Whether extreme circumstances existed in the present case so as to levy provisional attachment under section 281B of the Act is the question.
20. In the present case, the incriminating documents seized during the course of search and seizure operation reveal that the payments made by the petitioner No.1 to Cyprus / UK based companies towards marketing and advertisement expenses were further liable to be paid over to krainian advertising agencies who are in fact supposed to have advertised the product of the petitioner No.1 in Ukraine. The documents further reveal that the said Cyprus / UK based companies have credited the amounts received from the petitioner No.1 in the private bank account of the petitioner No.2 in Cyprus. Moreover, during the course of search, incomplete and / or unsigned invoices of the foreign companies along with their seals / stamps were recovered from the office of the petitioner No.1 (see page 544 of the petition). These incriminating documents prima facie establish that large scale tax fraud has been committed.
21. When confronted with the incriminating documents which are seized, the petitioner No.2 while recording his statement on 11/6/2008 promised that he would explain the entire seized materials but he left for UK on 14/6/2008. The petitioner Nos.3 & 4 who are other directors of the petitioner No.1 company expressed their inability to explain the seized materials (see page 191 of the petition). Thereafter, till date the petitioner No.2 has failed to furnish requisite information. In these circumstances, invoking section 281B of the Act on 24/7/2008 to protect the interest of revenue cannot be faulted.
22. The fact that the notice under section 153A of the Act as well as the order under section 281B of the Act have been issued on the same date i.e. on 24/7/2008 would not affect the validity of the provisional attachment, because, under section 132 of the Act it is not mandatory that the proceedings must be pending on the date of invoking section 281B of the Act. Provisional attachment can be levied even in cases where the proceedings are yet to be initiated. Therefore, issuing 153A notice and invoking section 281B of the Act on the same day would not affect the validity of the order passed under section 281B of the Act on 24/7/2008.
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