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of <h1>Court lifts bank account attachment under VAT Act, mandates Rs. 25 lakhs balance, clarifies reassessment rule.</h1> <h3>Shreem Realty Private Limited Versus State of Gujarat</h3> Shreem Realty Private Limited Versus State of Gujarat - TMI Issues:Challenging an order attaching bank account under VAT Act, genuineness of purchases, prejudging tax liability, lifting of attachment condition, possible tax liability calculation, maintaining minimum balance, setting aside the order, continuation of minimum balance requirement.Analysis:The petitioner challenged an order attaching their bank account under the VAT Act, alleging purchases from dealers involved in bogus billing activities. The department believed the purchases were not genuine, leading to tax evasion suspicions. The petitioner argued the purchases were legitimate, and the dealers' cancellations did not prove otherwise. They contended that tax liability should be determined through proper assessment proceedings, rather than prejudged actions affecting their business operations.The Court, upon hearing both parties, ordered the lifting of the bank account attachment on the condition that the petitioner maintains a minimum balance of Rs. 25 lakhs. The attachment was subsequently lifted, allowing the petitioner to resume account operations. The respondents provided an estimate of the petitioner's potential tax liability, indicating a principal amount of Rs. 33 lakhs, with additional interest and penalties as per the department's stance.Considering the ongoing assessment process and the potential tax liability, the Court determined that the minimum balance requirement of Rs. 25 lakhs should remain unchanged. Consequently, the impugned order attaching the bank account was set aside, but the petitioner was directed to maintain the minimum unencumbered balance of Rs. 25 lakhs until the completion of assessments for the relevant years, subject to reassessment if applicable. The petition was disposed of, providing clarity on the maintenance of the minimum balance requirement during the tax assessment period.
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