TaxTMI 
TaxTMI 
2008 (9) TMI 889
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....the illegal and arbitrary action on the part of the respondent-authorities of effecting attachment of the bank account of the petitioner No. 1-firms in each petition, that is, current account of ICICI, Bhavnagar branch and also current account of Syndicate Bank, Vastrapur branch, the details of which are stated in the petitions, and also for a prayer to declare that the action is illegal, arbitrary and violative of the Gujarat Value Added Tax Act, 2003 ("the VAT Act", for short) and the Rules made thereunder. It is also prayed for quashing and setting aside the alleged illegal and arbitrary action of the respondent-authorities of passing a provisional attachment order dated January 7, 2008 in S.C.A. No. 5335 of 2008 attaching the premises being C-3-406, Anushruti Tower, Nr. Muktidham Jain Derasar, S.G. Highway, Thaltej, and also for appropriate order for restraining the respondent No. 2 from issuing the communication/notices to third parties under section 44 of the VAT Act. It is required to be noted that identical prayers are also asked for in S.C.A. No. 7804 of 2008 and, conveniently, though the prayer (B) refers to the attachment of the same premises being C-3-406, Anushruti Tow....
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....cern solely owned, managed and administered by the husband of petitioner No. 2, namely, Kaushikkumar Pravinchandra Manek, and the said Shri Bhavani Ispat and petitioner No. 1-firm Shri Mahalaxmi Traders are having the same office address. The respondent-authorities have carried out the raid at the premises of the firm and the proceedings are initiated. It is also contended that the following notices have been issued to both the firms: Shri Mahalaxmi Traders (S.C.A. No. 5335 of 2008) Notice in form No. 401 Notice in form No. 301 Provisional attachment order Shri Bhavani Ispat (S.C.A. No. 7804 of 2008) Notice in form No. 104 Notice in form No. 401 It is contended that the communication/notice in form No. 401 is purported to have been issued under sections 67, 70 and 70A of the VAT Act and the proprietor of Shri Bhavani Ispat was directed to remain present on November 19, 2007 in respect of the aforesaid notice. Thereafter also, again, a notice in form No. 301 under rule 29(1) of the VAT Rules, 2006 was issued. At this juncture, it is also required to be mentioned that a notice in form No. 401 was issued to Shri Bhavani Ispat calling upon them to remain present on November 19,....
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.... value added tax at four per cent depending upon the purchase and sales during the particular period and the respondents have wrongly worked out the amount of Rs. 49.94 lakhs as the liability of tax under the VAT Act for Shri Mahalaxmi Traders. It has been contended that the petitioners have not evaded any tax and in any case the petitioners are the third parties qua the liability of the Bhavani Ispat and its proprietor and therefore the orders passed freezing bank account of petitioner No. 1-firm, i.e., Shri Mahalaxmi Traders in S.C.A. No. 5335 of 2008 is violative of article 14 of the Constitution and also the provisions of VAT Act. In S.C.A. No. 7804 of 2008, it has been contended that the action on the part of the authorities freezing the bank account is without any justifiable reasons particularly when the petitioners have not evaded any tax and they do not have any past record of evading tax. It is also contended that the authorities were not having any clarity in respect of the estimated value of four per cent tax on profit amount and it is an arbitrary action of imposing or effecting attachment or freezing the bank account as a result of which the transactions in th....
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.... assessment and the order for attachment is contrary to law and is arbitrary and highhanded. However, such a contention is required to be appreciated in light of the conduct as well as the scheme of the VAT Act. It would be evident from the annexures and notices produced including the order of provisional attachment and the show-cause notice issued in form No. 401 in exercise of powers under sections 67, 70 and 70A of the VAT Act and also other notice in form No. 301 which specifically provides that they should remain present. It is required to be appreciated and noted that the petitioner in S.C.A. No. 7804 of 2008, i.e., Shri Bhavani Ispat and its proprietor has been issued a notice in form No. 401 calling upon them to remain present in November, 2007. When it has not been complied with, another communication at annexure C has been addressed making it clear that penal action under section 85(2) could be initiated. Thereafter also by communication dated January 7, 2008 it has been made clear that as they have failed to comply with the notice in form No. 401 calling upon them to produce details and materials which they have not produced, another notice was issued for provisional as....
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.... under article 226 of the Constitution of India. As a matter of fact, the conduct of the petitioners would disentitle them from any indulgence by this court or exercise of discretionary relief. The petitioners cannot make a complaint that the assessment has not been made and there is any arbitrary or highhanded action inasmuch as there are specific notices issued to the petitioners and still they have failed and neglected to remain present for the purpose of assessment or clarification. Thereafter, as discussed hereinabove, in exercise of the powers under the Act, the Commissioner has proceeded to make the provisional assessment and attachment for which a grievance cannot be made. Moreover, another facet of the argument is that issuance of notice to third parties under section 44 may be restrained. However, the provisions of section 44 which starts with a non obstante clause clearly provide for taking such measures and for recovery of the amount due to any such persons who has not paid the tax and to whom the notices have been served. Further, the provisions of section 46 provide for "special powers of tax authorities for recovery of tax as arrears of land revenue". Section 73 pro....