Provisional attachment must balance revenue protection and taxpayer hardship; bank account attachment was lifted and property security partly sustained.

Provisional attachment under section 45 of the Gujarat VAT Act is a protective measure to safeguard revenue during assessment or reassessment, but it is harsh and must be used sparingly with due care. The Court found that the petitioners' estimated liability was limited and that the larger alleged liability was not shown on the material then available to be directly attributable to them. It further noted that interim protection had already reduced hardship by lifting bank account attachments and suspending the minimum stock condition, while immovable properties and the undertaking provided adequate security. The attachment was therefore sustained only over the immovable properties, with bank accounts kept released and movable properties freed subject to undertaking.

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Issues: Whether the provisional attachment orders passed under section 45 of the Gujarat Value Added Tax Act, 2003 required modification in view of the estimated liability and the need to balance protection of revenue with the hardship caused to the petitioners.

Analysis: The power of provisional attachment under section 45 is intended to safeguard the revenue during pendency of assessment or reassessment proceedings, but it is a harsh measure akin to attachment before judgment and must be exercised sparingly and with due care. On the facts, the petitioners' own estimated liability appeared to be limited, while the larger alleged liability was not shown to be directly attributable to them on the material then available. The Court also noted that substantial interim relief had already been granted by lifting the bank account attachments and suspending the minimum stock condition, and that the available immovable properties and the undertaking directed by the Court were sufficient safeguards.

Conclusion: The provisional attachment was sustained only to the extent of the immovable properties, while the attachment of bank accounts was confirmed as lifted and the movable properties were released subject to an undertaking. The petition was therefore partly allowed in favour of the petitioners.

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