TaxTMI 
TaxTMI 
2021 (11) TMI 573
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....sed the material on record. 3. The brief facts giving rise to the present petition are as under: Pursuant to the search said to have been conducted by the respondents in respect of the petitioners/assessee under Section 132 of the said Act of 1961, assessment proceedings are said to have been initiated under Section 153-A of the Act by the respondents. During the course of the said proceedings, respondent No.1 has proceeded to pass the impugned orders at Annexure-D, D1, D2 and D3, thereby provisionally attaching the fixed deposit of the petitioners by invoking Section 281(B) of the said Act, which is the subject matter of challenge in the present petition. 4. In addition to reiterating the various contentions urged in the Memorandum of Petition and referring to the documents produced by the petitioners, learned Senior counsel for the petitioners invited my attention to paragraph No.2 of the impugned order in order to contend that the necessary mandatory requirements and parameters as required in law to be followed by respondent No.1 prior to passing the provisional attachment order had not been complied with in as much as no reasons are assigned and no satisfaction is recorded an....
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.... of opinion before ordering a provisional attachment; third the existence of opinion that it is necessary so to do for the purpose of protecting the interest of the government revenue; fourth, the issuance of an order in writing for the attachment of any property of the taxable person; and fifth, the observance by the Commissioner of the provisions contained in the rules in regard to the manner of attachment. Each of these components of the statute are integral to a valid exercise of power. In other words, when the exercise of the power is challenged, the validity of its exercise will depend on a strict and punctilious observance of the statutory preconditions by the Commissioner. While conditioning the exercise of the power on the formation of an opinion by the Commissioner that "for the purpose of protecting the interest of the government revenue, it is necessary so to do", it is evident that the statute has not left the formation of opinion to an unguided subjective discretion of the Commissioner. The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of the government revenue. 50. By utilizing the expression "it is necessar....
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....ntained in Section 45 of the Gujarat Value Added Tax Act 2003, one of us (Hon'ble Mr. Justice MR Shah) speaking for a Division Bench of the Gujarat High Court in Vishwanath Realtor v. State of Gujarat observed: "8.3. Section 45 of the VAT Act confers powers upon the Commissioner to pass the order of provisional attachment of any property belonging to the dealer during the pendency of any proceedings of assessment or reassessment of turnover escaping assessment. However, the order of provisional attachment can be passed by the Commissioner when the Commissioner is of the opinion that for the purpose of protecting the interest of the Government Revenue, it is necessary so to do. Therefore, before passing the order of provisional attachment, there must be an opinion formed by the Commissioner that for the purpose of protecting the interest of the Government Revenue during the pendency of any proceedings of assessment or reassessment, it is necessary to attach provisionally any property belonging to the dealer. However, such satisfaction must be on some tangible material on objective facts with the Commissioner. In a given case, on the basis of the past conduct of the dealer and ....
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.... a provisional attachment; (vii) The formation of an opinion by the Commissioner under Section 83(1) must be based on tangible material bearing on the necessity of ordering a provisional attachment for the purpose of protecting the interest of the government revenue; (viii) In the facts of the present case, there was a clear non-application of mind by the Joint Commissioner to the provisions of Section 83, rendering the provisional attachment illegal; (ix) Under the provisions of Rule 159(5), the person whose property is attached is 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; (xi) A final order having been passed....