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2023 (2) TMI 537 - HC - GSTRejection of proposal of the petitioner to replace provisionally attached movable property in the form of Fixed Deposits and Current Bank Accounts - whether in wake of the earlier order of this Court in Special CA No.188 of 2022 on 27.01.2022, the request of the petitioner to replace the properties should be permitted or not? - HELD THAT:- Order of provisional attachment passed under Section 83 of the CGST Act by the respondent authorities on 25.11.2021. The CBIC issued the circular dated 23.02.2021 laying down the guidelines for provisional attachment of the property under Section 83 of the CGST Act. Guidelines No.3.4.6 provides that any movable property including bank account belonging to the taxable person when has been attached, the same can be released when the taxable person offers in lieu of it any other immovable property, if the same is sufficient to protect the interest of the revenue and such immovable property should be of the value not less than the tax amount in dispute. The same should be free from any charges, liens, mortgaged or encumbrance, the property’s tax also needs to be fully paid up and the same is not to be involved in any legal dispute. The respondent No.3, having realized that it is only the property belonging to a taxable person that can be provisionally attached under Section 83 of the Act and the partner of an LLP not being a taxable person in the case on hand, thought fit to take the aid of Section 90 and Section 137 resply of the Act for the purpose of provisionally attaching a property owned by the partner of the LLP. Whether Section 90 of the Act has any application to the case on hand? - HELD THAT:- What Section 90 of the Act, 2017 conveys is the very same principle as enunciated under Section 25 of the Partnership Act. In future, as and when the liability of the LLP as a taxable person is determined and fixed, such liability would be joint and several liability of all its partners. In the case on hand, the respondent No.3 committed a serious error in invoking Section 90 of the Act for the purpose of provisionally attaching a property owned by a person of the LLP under Section 83 of the Act - Sub-section (84) of Section 2 of the Act, 2017 defines the term “person” to include an individual, a Hindu Undivided Family, a company, a firm, a limited liability partnership, etc. Therefore, the Act recognizes a firm as a dealer and as a person. The legislature having treated an LLP as a taxable entity, distinct from the individual partners constituting it, it was not open for the respondent No.3 to provisionally attach the immovable property owned by a partner of the firm. This Court, thus, has been very clear that the respondent No.3 was unjustified in provisionally attaching the personal property owned by the partner of the firm under Section 83 of the CGST Act, as she is not a taxable person for being the partner of the firm. The property offered by the petitioner is unencumbered. The property valuation of which, as given by the State, is Rs. 10,48,84,200/- being the market value, whereas, the value of the very property offered in substitution being the plots No.7,8,9,10 and 11 of Revenue Survey No.49/1/ P3, Maruti Park, 150 Ft.Ring Rad, Village-Ronki, Taluka- Dist.Rajkot, as per the Government Approved Valuer Mr. Suresh Mistry is Rs.13,01,92,000/-. There are no reason to disregard the valuation given by the Government Approved Valuer on a higher side in absence of any other material or the reason for rejecting the same. Therefore, we direct respondents No.2 and 3 to substitute the same with the amount of fixed deposit provisionally attached, except the amount of fixed deposit of Rs.2,24,99,844/- lying in the current account. The fixed deposit of Rs.2,24,99,844/- lying in the current account shall continue to be in the provisional attachment. The remaining amount, which has been provisionally attached, shall be immediately released on receiving the copy of this order along with an undertaking on the part of the petitioner and the partner-cum-owner of the property. The provisional attachment made of the amount of Rs.2,24,99,844/- i.e. fixed deposit in the current accounts shall continue to be in the fixed deposit, remaining amount shall be released on receiving the copy of this order and the undertaking on the part of the petitioner - petition allowed in part.
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