TaxTMI 
TaxTMI 
2021 (10) TMI 523
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....enior Intelligence Officer/R2. Though notice has been issued to the Branch Manager, Indian Bank/R3, there was no appearance for the Bank. 3. In short, the case of the petitioner is that the impugned attachment under Section 83 of the CGST Act is without any statutory sanction as it is consequent upon action under Section 67 of the Act, which deals with the power of the authorities to engage in inspection, search and seizure. The scope of Section 87 is wholly based upon the 'opinion' of the concerned Commissioner to the effect that the interests of the revenue were to be safeguarded and sanctioning coercive recovery proceedings of the nature of bank attachment in a particular case. 4. The Head Office of the petitioner was subject to proceedings for inspection, search and seizure by R2 and other officials of the Intelligence Wing on 09.01.2020. A Mahazar was drawn and various materials including files and a pendrive, seized. With this, proceedings under Section 67 have been, according to the petitioner, concluded. This aspect of the matter is not disputed by the respondents. Section 67 provides exhaustively for the procedure to be engaged in and carried out by officials of GST ....
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....her under Section 73 or 74 initiating proceedings for assessment. 8. The second and more pertinent question that remains for determination is as to whether the 'opinion' of the Commissioner in this case, is based upon a legitimate and legal apprehension that the interests of the revenue required to be protected. I had on 05.07.2021, thus recorded as follows: Heard both learned counsel in brief. 2. The question to be answered is as to whether the Commissioner has recorded his opinion, as required statutorily under Section 83 of the Central Goods and Services Tax Act, 2017 (Act) prior to the attachment of the petitioner's bank accounts on 23.11.2020. In the impugned order attaching the bank accounts, the Principal Additional Director General (commensurate with the Commissioner) states that the attachment is 'in order to protect the interest of revenue'. However, this apprehension should be supported by the recording of the reasons on the basis of which he comes to such conclusion. 3. List on 14.07.2021 within the first five matters after admission. Records to be produced. 9. In response, Mr.Sundareswaran has filed a compilation dated 16.07....
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....ailing fraudulent ITC from bogus/non-existent units. The proceedings were placed for approval on 23.11.2020 and approved on the same day by R1 in the following terms: 'Since the said firms have been found to have availed fraudulent ITC passed on by bogus firms and are involved in availment of and passing on of fraudulent ITC. Bank accounts may be attached to protect revenue.' 13. The error committed by R2, as noted by me in the preceding paragraphs, has been perpetrated by R1, whose 'opinion', as above, also proceeds on the firm conviction that the claim of ITC by the petitioner is fraudulent and emanated from bogus, non-existent firms. His opinion, based upon which the impugned proceedings have been taken is wholly non-speaking, makes no reference to materials, if any, found in the course of the Investigation and the reasoning upon which he arrives at the conclusion that the petitioner's bank account is to be attached. 14. Thereafter, on 09.12.2020, R2 proposes to call upon the firms from which the petitioner claims to be engaged in business, to enquire and verify whether the claim of ITC was proper. There is no flaw or error in this, as R2 is well within his domain....
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....n the serial numbers 1 to 5. Further, the ineligible ITC amount of Rs. 38,37,041/- for the serial numbers 6 to 9 will be paid in a weeks time. It is further submitted that the relevant documents have been seen and acknowledged for the units mentioned in serial numbers 1 to 9. On the basis of the aforesaid materials, revenue would argue that there was more than enough justification for the impugned attachment proceedings. 17. The petitioner, in this regard, relies upon four decisions, three of the Gujarat High Court and one of Bombay High Court as follows: (i) Valerius Industries V. Union of India (R/Special Civil Application No.13132 of 2019 dated 28.08.2019) (ii) Pranit HEM Desai V. Additional Director General and another (2020 6 GSTL 15) (iii) Kushal Ltd. V. Union of India (R/Special Civil Application No.19533 of 2019 dated 17.12.2019) (iv) Kaish Impex Limited V. The Union of India and others (W.P.No,.3145 of 2019 dated 17.01.2020) 18. In Valerius Industries (supra) the challenge was to an order of assessment passed under the provisions of the Gujarat Goods and Services Tax Act, 2017 (in short 'Gujarat GST Act') and an order of provisi....
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....hould take into consideration two things: (i) whether it is a revenue neutral situation (ii) the statement of "output liability or input credit". Having regard to the amount paid by reversing the input tax credit if the interest of the revenue is sufficiently secured, then the authority may not be justified in invoking its power under Section 83 of the Act for the purpose of provisional attachment. 19. The Writ Petition came to be allowed and the impugned order/demand set aside granting liberty to the parties to proceed against that petitioner under Section 74 of the Gujarat GST Act, if so appropriate. The order of provisional attachment upon the stock of goods as well as the petitioner's bank accounts was quashed. 20. In the case of Pranit HEM Desai (supra) a similar issue was discussed by the same Bench of the Gujarat High Court, which reiterated its earlier view in the cases of Valerius Industries (supra), M/s Patran Steel Rolling Mill vs Assistant Commissioner of State Tax, Unit 2 (65 GSTR 177) and the decision of the Bombay High Court in the case of Gandhi Trading v. Asst. CIT ((1999) 239 ITR 337 Bom.) The discussion at paragraphs 6, 7 and 8 of their decision in Patran S....
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....ned order of attachment, therefore, cannot be sustained. It is clarified that the fact that the petitioner has deposited a sum of Rs. 17,00,000/ during the course of the search proceedings shall not be construed as an admission of such dues on the part of the petitioner. 8 Before parting, the court deems it fit to caution the concerned authorities that while exercising powers under section 83 of The GGST Act, the authorities should try to balance the interest of the Government revenue as well as a dealer to ensure that while the interest of the revenue is safeguarded, the dealer is also in a position to continue with his business, because it is only if the dealer continues with the business that he would generate more revenue. The authorities should keep in mind that bringing the business of a dealer to a halt does not in any manner serve the interest of the revenue. Therefore, while taking action under section 83 or 67(2) of the GGST Act, the concerned authorities should take care to ensure that equities are maintained and while securing the interest of the revenue, they should attempt to see that the dealer is in a position to continue with the business. This court does ....
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....liability of an assessee stood determined even prior to the issue of a notice of assessment and merely stating that, in his opinion, this was a case where the interests of the revenue are to be protected. 24. The power conferred upon an authority under Section 83 is substantial and with great power comes great responsibility. The authority concerned must justify the invocation of the coercive and intrusive recovery proceedings against the assessee, even prior to determination of liability and passing of an assessment order. The burden that lies upon the revenue is heavy and has to be seen to be discharged by them in a proper manner in each and every case where power under Section 83 is invoked. 25. The Hon'ble Supreme Court in a recent judgment in the case of M/s.Radhakrishnan Industries V. State of Himachal Pradesh and others (Civil Appeal No.1155 of 2021 dated 20.04.2021) dealt with very similar circumstances as before me now, setting aside the proceedings for bank attachment noticing that the discharge of the condition under Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017 was, in that case insufficient. The Hon'ble Bench perused the records minutely and ....
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....entitled to dual procedural safeguards: (a) An entitlement to submit objections on the ground that the property was or is not liable to attachment; and (b) An opportunity of being heard; There has been a breach of the mandatory requirement of Rule 159(5) and the Commissioner was clearly misconceived in law in coming into conclusion that he had a discretion on whether or not to grant an opportunity of being heard; (x) The Commissioner is duty bound to deal with the objections to the attachment by passing a reasoned order which must be communicated to the taxable person whose property is attached; ................ 26. I extract the opinion of the sanctioning authority in the case of M/s Radhakrishna (supra) that was found inadequate by the Hon'ble Supreme Court that may be compared with the opinion of the Commissioner in the present case, to illustrate the degree of woeful inadequacy/lacunae in the present case. 28.10.2020: The case of M/s.G.M.Powertech, Kala-Amb (H.P.) GSTIN: 02AARFG98301Z7 has been decided under Section 74 of the HPGST/CGST Acts, 2017 and an additional demand of Rs. 39 Crores has been created on account of fake/fraudu....