TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1418
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....they are doing business. 3. While so, a search under Section 67 of the TNGST Act was conducted on 24.02.2021 at the premises of the petitioners. 4. Pursuant to the said search, according to the Revenue, they have unearthed incriminating documents or accounts, which according to the Revenue, reveals some tax evasion on the part of the petitioners. Therefore, the necessary assessment proceedings has to go in respect of these two petitioners / assessees. 5. However, during the pendency of the said assessment proceedings, which was initiated under Section 67 by way of search and seizure, the respondent i.e., the first respondent has invoked Section 83 of the TNGST Act, under which, the said respondent passes an order on 20.12.2021, whereby the current account of the petitioners/assessees maintained in the 6th respondent Bank in W.P.No.3083 of 2022 and 7th & 8th respondent Bank in W.P.No.3079 of 2022 were freezed. By virtue of the said order passed under Section 83 of the TNGST Act, the respondent directed the Bank authorities to attach the current account of the petitioners respectively and directed that there should be no debit undertaken from the said account on behalf of the peti....
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.... learned counsel would further contend that, the power to order a provisional attachment of a property of a taxable person including a Bank account is draconian in nature and the conditions, which are prescribed by the Statute for a valid exercise of the power, must be strictly fulfilled. He will also rely upon the further direction or observation made by the Hon'ble Supreme Court that the exercise of the power for ordering a provisional attachment must be preceded by the formation of an opinion by the Commissioner that it is necessary so to do for the purpose of protecting the interest of the Government Revenue. Before ordering a provisional attachment, the Commissioner must form an opinion on the basis of tangible material that the assessee is likely to defeat the demand, if any and that therefore, it is necessary so to do for the purpose of protecting the interest of the Government Revenue. 11. Heavily relying upon these findings given by the Hon'ble Supreme Court of India in Radhakrishnan case (cited supra), the learned counsel would contend that, the said mandatory guidelines has not been followed in the present case. 12. He would also canvass the further point that,....
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....or to protect the interest of the State Revenue, has been stated. Thus, the order would not stand in the legal scrutiny and it would get vitiated, therefore, the consequential communication issued by the Bank authority dated 30.12.2021 to both the petitioners also could not be enforced. Therefore, the said orders can be interfered with and the prayers sought for herein can be allowed, he contended. 15. Per contra, Mr.N.R.R.Arun Natarajan, learned Special Government Pleader appearing for the respondents would submit that, it is a case of search followed by the present proceedings issued under Section 83 of the TNGST Act, wherein it become necessitated for the first respondent on the basis of the opinion, he already formed, because of the input submitted or supplied to him, that it become expedient to invoke Section 83 of the TNGST Act, to freeze the bank account of the petitioners, without which, the interest of the Government, from the Revenue point of view, cannot be protected. 16. The language used in Section 83 of the TNGST Act merely says that, the Commissioner must form an opinion to invoke Section 83 of the TNGST Act, on what basis such an opinion should be formed, need not....
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....dhakrishna's case (cited supra) and passed the said order. 21. Pointing out those aspect, the learned Special Government Pleader would contend that, in the present case, the petitioner ought not to have come before the High Court by directly invoking Article 226 of the Constitution of India. In this context, the learned Special Government Pleader would contend that, under Rule 159 of the Tamil Nadu Goods and Service Rules, 2019 (In short, "the Rules") under the heading 'Provisional attachment of property', especially under the Sub-Rule (5) of Rule 159, any person whose property is attached may, within seven days of the attachment under sub-rule(1), file an application to the effect that the property attached was or is not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC 23. 22. Relying upon the sub-rule(5) of Rule 159 of the Rules, the learned Special Government Pleader would contend that, when such kind of procedure is available under the Rule, the petitioner/assessee could have very well filed such an application under Sub-Rule(5), s....
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....clude that (i) The Joint Commissioner while ordering a provisional attachment under section 83 was acting as a delegate of the Commissioner in pursuance of the delegation effected under Section 5(3) and an appeal against the order of provisional attachment was not available under Section 107 (1); (ii) The writ petition before the High Court under Article 226 of the Constitution challenging the order of provisional attachment was maintainable; (iii) The High Court has erred in dismissing the writ petition on the ground that it was not maintainable; (iv) The power to order a provisional attachment of the property of the taxable person including a bank account is draconian in nature and the conditions which are prescribed by the statute for a valid exercise of the power must be strictly fulfilled; (v) The exercise of the power for ordering a provisional attachment must be preceded by the formation of an opinion by the Commissioner that it is necessary so to do for the purpose of protecting the interest of the government revenue. Before ordering a provisional attachment the Commissioner must form an opinion on the basis of tangible material that the assessee is likely to defeat....
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....ctly fulfilled. In clause (v), the Court says that, the exercise of the power for ordering a provisional tax attachment must be preceded by the formation of an opinion by the Commissioner that it is necessary so to do for the purpose of protecting the interest of the Government Revenue. Before ordering a provisional attachment, the Commissioner must form an opinion on the basis of tangible material, that the assessee is likely to defeat the demand, if any, and that therefore it is necessary so to do for the purpose of protecting the interest of the Government Revenue. In clause (vii), the Court says that the formation of an opinion of the Commissioner under Section 83(1) must be based on the tangible material, bearing on the necessity of ordering a provisional attachment for the purpose of protecting the interest of the Government Revenue. In clause (x), the Court says that, the Commissioner is duty to bound to deal with the objection to the attachment by passing a reasoned order, which must be communicated to the taxable person, whose property is attached. 29. If we apply the said 4 clauses in the facts of the case, certainly this Court without hesitation, can come to a conclusio....
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.... consideration and all these things if not exhaustively but atleast to the limited extent, must have been indicated in the order itself, so that the assessee can have a prima facie satisfaction that atleast the provision of the Act has not been violated as interpreted by the Hon'ble Supreme Court. Therefore, in the present case, this Court has no hesitation to hold that, the first respondent has not followed the mandatory guidelines issued by the Hon'ble Supreme Court in the said judgment in Radhakrishnan Case (cited supra) followed by orders passed by the writ court as referred to above while passing order under Section 83 dated 20.12.2021, making a provisional attachment of the Bank Account of the petitioners in these cases. 36. Insofar as the defence raised by the learned Special Government Pleader appearing for the respondents that the writ petitions are not maintainable because the petitioners have not exhausted the appeal / application / objection remedy provided under Sub Rule (5) of Rule 159 is concerned, it is answered by the learned counsel appearing for the petitioner that, within one week time as provided under Sub Rule (5), on 23.12.2021, a detailed objections....