TaxTMI 
TaxTMI 
2015 (11) TMI 217
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....ered as a dealer under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the GVAT Act") as well as the Central Sales Tax Act, 1956. It is the case of the petitioner that it was regularly filing its sales tax return. During the year 2013-14, that is, the first year of commencement of business, the petitioner had made purchases of cigarettes from various local dealers from and within the State of Gujarat and sold the same to other dealers in the national capital territory of Delhi. The petitioner made purchases on tax invoices raised by local dealers within the State of Gujarat, paid tax at the rate of 30% and made inter-state sales on the said goods to Delhi by raising retail invoices against Form 'C'. As per the quarterly returns filed by the petitioner for the first quarter, that is, for the period 1.10.2013 to 31.12.2013 there was no tax payable as per the return under the GVAT Act. According to the petitioner, it was entitled for provisional refund of Rs. 5,44,36,090/- for the above period as per the VAT return because of the difference in the rate of tax between the local and inter-state sales. As it was the first year and first quarter of business, the....
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....unts and all other documents were confiscated by the fourth respondent and Form 309 came to be issue under subrule (1) of rule 46 of the GVAT Act imposing penalty. Notice under sections 67, 70 or 70A of the GVAT Act for production of accounts, documents, etc. and notice in Form 301 under subrule (1) of rule 29 for provisional assessment under section 32 of the GVAT Act came to be issued. Notice under rule 9, namely for production of certificate of registration before the registering authority as well as notice under section 67(3)(4) read with rule 50, viz. for retention of books of accounts, register and documents seized from the petitioner came to be issued. It appears that the petitioner tendered a written statement dated 23.4.2015 and then addressed a letter dated 4.5.2015 to the fourth respondent requesting him to take up the matter of the petitioner for early assessment for the years 2013-14 and 2014-15 and to release the amount of refund as claimed for. A month thereafter, the petitioner received letters from the banks informing that all the accounts of the petitioner have been attached as per notices received by them from the fourth respondent, which also stated that the dep....
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....r. It, should, therefore, be exercised with extreme care and caution. It should not be exercised unless there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of the whole or any part of his property with a view to thwarting the ultimate collection of the demand. Moreover, attachment should be made of the properties and to the extent it is required to achieve the above object. It should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee. Attachment should be made as far as possible of immovable properties if that can protect the revenue. Attachment of bank accounts and trading assets should be resorted to only as a last resort. In any event, attachment under section 281B should not be equated with attachment in the course of recovery proceedings. It was submitted that the provisional attachment under section 45 of the GVAT Act would be governed by similar principles and that there should be sufficient material on record to justify that satisfaction for taking recourse to such provisions. 4.2 Reliance was placed upon t....
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....fter before the VAT Tribunal and the High Court. At all such appellate stages there are powers for granting stay or waiving requirement of pre-deposit if statute so provides. Therefore, to contend that mere pendency of assessment or re-assessment proceedings would clothe the authority to pass order of provisional attachment would be wrong. Pendency of such proceedings would be a prerequirement for exercising such powers. But the additional requirement would be that it is necessary to do so to protect the interest of revenue." 4.3 Reliance was placed upon an unreported decision of this court in the case of Atul Motors Pvt. Ltd. vs. State of Gujarat rendered on 14.2.2014 in Special Civil Application No.959 of 2014, wherein it was the case of the petitioner that there could be no recovery of tax dues unless and until the tax demand is crystallised and that in the absence of any assessment, the respondent cannot recover taxes. The court observed that insistence on collecting cheques from the petitioner at that stage could not be countenanced and directed the respondents to return the cheques collected from the petitioner. 4.4 Reliance was placed upon an unreported decision of thi....
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.... that they do not tally with the amount of sale and purchase giving rise to a strong suspicion of such transactions being fraudulent in nature with a view to claim input tax credit and refund thereof. It was further submitted that the petitioner has tried to get benefit of two per cent tax against 'C' Forms. It was pointed out that it was the Delhi Trade and Tax Department which had asked the respondent to inquire into the genuineness and existence of the said dealer. Moreover, 'C' forms of five of the dealers have been cancelled which show that the transactions with the petitioner herein are not genuine in nature as a result whereof, the petitioner is not entitled to the benefits of two per cent tax against 'C' forms as claimed by it. 5.1 As regards recording of subjective satisfaction prior to issuance of order of provisional attachment, the attention of the court was invited to the affidavit dated 15.9.2015 wherein it has been stated that the requirements for exercise of powers under section 45 of the GVAT Act are duly satisfied and that the fact that the authority had arrived at a subjective satisfaction and recorded the same is borne out by the notin....
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....re the court that such applications shall be processed and decided within a period of four weeks from the date of receipt of a copy of this order. Under the circumstances, the second grievance also no longer survives. 8. Insofar as the provisional attachment which has been made by the respondent authority, on behalf of the respondents it has been stated that the subjective satisfaction was recorded prior to the issuance of the order of provisional assessment which is duly borne out from the notings on file. On the other hand, the learned advocate for the petitioner has drawn the attention of the court to the additional affidavit dated 3.9.2015 of the Joint Commissioner, Commercial Tax Department, Division-III wherein he has stated that the bank accounts of the petitioner have been attached in view of pendency of assessment proceedings, during which huge tax liability is likely to arise which needs to be protected. Therefore, the said attachment notice cannot be vitiated on account of non-fulfillment of section 45 of the GVAT Act. It was submitted that thus, while on 3.9.2015, it was the stand of the respondent that non-fulfillment of requirement of section 45 would not vitiate t....
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....strong prima facie case to show that upon ultimate conclusion of the assessment, there is every likelihood of tax, interest and/or liability being attached on a dealer, and further that pending such consideration, it is necessary in the interest of Government revenue to pass order of provisional attachment. Such powers cannot be exercised in a routine manner in every case of reopening of assessment de hors the consideration noted above and in any case not merely because some assessment proceedings are pending. Pendency of such proceedings would be a pre-requirement for exercising such powers. But the additional requirement would be that it is necessary to do so to protect the interest of revenue. The court, accordingly, did not accept the contention of the learned counsel for the petitioner of total lack of power of the authority to pass order of provisional attachment. It, however, on merits examined as to whether in the facts of the said case, such powers could have been exercised. The court observed that it was conscious that such powers are discretionary in nature, and as long as such discretion is exercised bonafide and sufficient material is available on record permitting exe....