2024 (1) TMI 76

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the petitioner challenges the provisional attachment order dated 01.04.2022 and 06.04.2022 issued under Form GST DRC - 22 by the 4th respondent as illegal, arbitrary and to set aside the same and pass such other orders deemed fit. 2. Petitioner's case succinctly is thus: (a) Petitioner is a company engaged in the business of iron scrap and during the course of search operations conducted by the respondent authorities U/s 67 of A.P. Goods & Service Tax Act, (for short 'AP GST Act, 2017') on 31.03.2022, the respondent authorities seized the books of accounts and issued summons directing the Director and employees of the petitioner company U/s 70 of the AP GST Act, 2017 and accordingly the deponent of the writ affidavit and the emp....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....S.T.L. 23 = MANU/GJ/1423/2020. Learned Government Pleader resisted the writ petition and also interim application contending that there was absolutely no illegality nor any procedural infirmity in the impugned action. He further contended that only after recording valid reasons in the note file and with an intention to protect the interest of Government revenue, the 4th respondent issued impugned provisional order of attachment of the bank accounts of the petitioner. He thus opposed the writ petition as well as the interim application. This Court passed an elaborate order with the following observations: "Admittedly, except saying that the orders of provisional attachment are passed in order to protect the interest of the Gover....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f opinion. It is also the submission of the learned counsel for the petitioner that, by pressing into service the provisions of Section 67 of the Act, the respondent authorities conducted inspection, search and seizure. It is also submitted by the learned counsel that, pursuant to the summons issued under Section 70 of the Act, the Director and the employees appeared before the competent authority and their statements were also recorded and the documents were also seized. It is further submitted that, in view of the same, it cannot be said that the proceedings under Section 67 of the Act are pending. In order to show that the respondents have concluded proceedings under Section 67 of the Act, a copy of the order of seizure vide Form GST INS....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ucting searches at different locations under the provisions of Section 67 of the APGST Act, 2017. During such search of the aforesaid three traders it was identified that no such firms in existence at the given address. Accordingly, searches at the principal place of business of the petitioner along with the residential premises of the Managing Director of the petitioner company were also conducted in the presence of independent witnesses. Since the investigation revealed that the location of the business premises of the input suppliers of the petitioner Company are fake and since the input tax credit passed on by them is irregular, considering the quantum of irregularly availed ITC, it was considered essential to provisionally debit freeze....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts of these fake firms; (f) That no record pertaining to the petitioner company were not available in their business/residential premises; (g) That even on the day of the search i.e., 31.03.2022, the petitioner company has issued E-Waybills for a total value of Rs. 1,44,43,260/-, thereby passing on suspected irregular ITC of Rs. 25,99,787/- to their clients; (h) That the amounts transferred from the petitioner company to the fake input supplier firms were subsequently diverted to individuals/ firms/ companies which have no declared business dealings them 6. It is further contended, reasons for action U/s 83 of the APGST Act r/w DRC-22 were sent to the petitioner by post. It is further submitted that the petitio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ons for ordering provisional attachment were recorded in the Note File and that there is no need to extract the same or state the same in the provisional order of attachment, cannot stand for judicial scrutiny. It is further observed, the Hon'ble Supreme Court in the above referred judgment also categorically ruled that the formation of opinion on the basis of tangible material which indicates the necessity to order provisional attachment to protect the interest of the Government revenue is mandatory. It is further observed that unless reasons are recorded broadly, the assessee cannot be expected to file any objections under the provisions of Rule 159(5) of the Rules. This Court further observed that as per the aforesaid judgment of Hon'ble....