TaxTMI 
TaxTMI 
2020 (10) TMI 760
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....initiated the same. (D) pending admission, hearing and till final disposal of this petition, Your Lordship may be pleased to direct the Respondents (I) To lift the attachment of factory premises; (II) To stay the operation of Form GST DRC 01A; (III) Not to take any coercive action against the petitioner. (E) To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice; (F) To award Costs of and incidental to this application be paid by the Respondents; (G) And for this act of kindness, the Petitioner shall, as in duty bound, ever pray." 2. The facts, in brief, leading to filing of this writ application, may be summarized as under: 2.1 The writ applicant is a partnership firm registered with the GST having GSTIN 24ANPPS8920H1Z1. The firm is engaged in the business of manufacturing of different types of textile fabrics. It appears that an inquiry has been initiated against the firm by the CGST Department, Surat by issuing summons under Section 70(1) of the Act, 2017 dated 30th June, 2020. It appears that pending the inquiry, the Department has t....
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....r permission of this department. Or The property mentioned above shall not be allowed to be disposed of without the prior permission of this department." 5. We may also quote the order passed in Form GST DRC 22 for the residential premises. "FORM GST DRC -22 Reference No. Date 24.07.2020 To Name:-M/s. Anjani Impex Addresss:- B-1 10, Hojiwala Ind Estate, Sachin, Vanz Palsana Road- 394230 (Bank/Post Office/Financial Institution/Immovable Property registering authority) Provisional attachment of property under section 83 It is to inform that M/s. (name) having principal place of business at (address) bearing registration number as (GSTIN/ID), PAN is 24ANPPS8920HIZI a registered taxable person under the <<SGST/CGST>> Act. Proceedings have been launched against the aforesaid taxable person under section 74(5) of the said Act to determine the tax or any other amount due from the said person. As per information available with the department, it has come to my notice that the said person has a <<saving/current/FD/RD/depository>> account in your << bank/post office/financial institution>> having account no:- Or Property located at property ID & location- M-113 Some....
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....ry ground, wishful thinking, howsoever laudable that may be. Such a course is impermissible in law. At the cost of repetition, the formation of the opinion, though subjective, must be based on some credible material disclosing that is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue. The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings. "Belief" is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed, as it has been held by the Supreme Court in Sheonath Singh's case [AIR 1971 SC 2451], that the Court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court. In the case at hand, Ms. Mehta, the learned A.G.....
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....], the Supreme Court pointed out, on consideration of several English and Indian authorities that the expressions "is satisfied", "is of the opinion" and "has reason to believe" are indicative of subjective satisfaction, though it is true that the nature of the power has to be determined on a totality of consideration of all the relevant provisions. The Supreme Court while construing Section 237 of the Companies Act, 1956 held : "64. The object of S. 237 is to safeguard the interests of those dealing with a company by providing for an investigation where the management is so conducted as to jeopardize those interests or where a company is floated for a fraudulent or an unlawful object. Clause (a) does not create any difficulty as investigation is instituted either at the wishes of the company itself expressed through a special resolution or through an order of the court where a judicial process intervenes. Clause (b), on the other hand, leaves directing an investigation to the subjective opinion of the government or the Board. Since the legislature enacted S. 637 (i) (a) it knew that government would entrust to the Board its power under S. 237 (b). Could the legislature have left....
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.... of the English Act observes that "the Board of Trade will always exercise its discretionary power in the light of specified grounds for an appointment on their own motion" and that "they may be trusted not to appoint unless the circumstances warrant it but they will test the need on the basis of public and commercial morality." There must therefore exist circumstances which in the opinion of the Authority suggest what has been set out in subclauses (i), (ii) or (iii). If it is shown that the circumstances do not exist or that they are such that it is impossible for any one to form an opinion therefrom suggestive of the aforesaid things, the opinion is challengeable on the ground of non-application of mind or perversity or on the ground that it was formed on collateral grounds and was beyond the scope of the statute." 10. The Supreme Court while expressly referring to the expressions such as "reason to believe", "in the opinion" of observed : "Therefore, the words, "reason to believe" or "in the opinion of do not always lead to the construction that the process of entertaining "reason to believe" or "the opinion" is an altogether subjective to process not lending itself even to ....
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....ties so far mentioned is that the notion of absolute or unfettered discretion is rejected. Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended. Although the Crown's lawyers have argued in numerous cases that unrestricted permissive language confers unfettered discretion, the truth is that, in a system based on the rule of law, unfettered governmental discretion is a contradiction in terms. The real question is whether the discretion is wide or narrow, and where the legal line is to be drawn. For this purpose everything depends upon the true intent and meaning of the empowering Act. The powers of public authorities are therefore essentially different from those of private persons. A man making his will may, subject to any rights of his dependents, dispose of his property just as he may wish. He may act out of malice or a spirit of revenge, but in law this does not affect his exercise of his power. In the same way a private person has an absolute power to allow whom he likes to use his land, to releas....
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....be said to run into one another. The influence of extraneous matters will be undoubtedly there where the authority making the order has admitted their influence. An administrative order which is based on reasons of fact which do not exist must be held to be infected with an abuse of power." 14. We may also refer to and rely upon a decision of the Supreme Court in the case of ITO Calcutta vs. Lakhmani Mewal Das reported in [(1976) 103 ITR 437 (SC)] wherein it had been held as under: "The reasons for the formation of the belief contemplated by Section 147(a) of the Income-tax Act, 1961, for the reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the I.T.O. and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the Court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the I.T.O. o....