Court Upholds GST Attachment Order; Petitioner Allowed to Clear Dues in Installments

The court upheld the attachment order of plant, machinery, and stock by GST authorities due to unpaid GST liabilities. The petitioner, facing financial crisis, proposed clearing dues in installments. The court emphasized prompt payment without sympathy for non-depositing of taxes, allowing the petitioner to operate under strict conditions. Conditions included depositing a specified amount by certain dates and clearing the remaining sum in installments. The court suspended the attachment on stock, permitting manufacturing activities to continue, with restoration of restrictions for non-compliance. The petitioner was directed to cooperate with assessment proceedings and GST-related processes.

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Issues:
Challenge to order of attachment of plant, machinery, and stock due to unpaid GST liabilities.

Analysis:
The petitioner challenged an order of attachment by GST authorities due to unpaid GST liabilities amounting to Rs. 97.00 Lacs. The petitioner admitted the inability to discharge the tax liabilities, stating that a portion has been paid, leaving a residue of about Rs. 64.00 Lacs. The petitioner cited severe financial crisis for non-payment, leading to the inability to file Returns. The authorities invoked powers under Section 83 of the Gujarat Goods and Service Tax Act, 2017 to attach the petitioner's assets.

The petitioner argued that the financial crisis prevented tax payment, risking a halt in manufacturing activities and inability to pay creditors and workers. The petitioner proposed clearing dues in installments. The authorities contended that the self-assessed tax, collected from purchasers, should have been paid, and financial hardship cannot justify non-payment. They defended the attachment to safeguard government revenue.

The court acknowledged the outstanding dues and emphasized the need for the petitioner to clear them promptly, without sympathy for non-depositing of collected taxes. The court recognized the authority's power to conduct best judgment assessment if Returns are not filed, requiring the petitioner to provide necessary material for assessment. Despite this, the court allowed the petitioner to operate the factory under strict conditions.

The conditions imposed included depositing Rs. 5.00 Lacs by specific dates and clearing the remaining amount in three equal monthly installments, starting from December 2018. The petitioner's Director was required to file an Undertaking ensuring compliance. The attachment on stock was suspended, allowing manufacturing activities to continue, while failure to meet conditions would result in restoration of restrictions.

The court directed the petitioner to cooperate with assessment proceedings and other GST-related processes. The petition was disposed of accordingly, with direct service permitted.

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