TMI Blog2015 (9) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no need of continuing the provisional attachment ordered by the Joint Commissioner vide Exhibit-A to the Petition. By accepting the statement made by the learned Senior Counsel as an undertaking given to the Court and directing that movable and immovable Assets and properties of the Petitioner shall not be disposed of, transferred and no third party interest of any nature created therein nor their possession shall be parted with during the pendency of the proceedings under MVAT Act, 2002, as noted above, we set aside the impugned order. Ordered accordingly. - The bank accounts and which are the subject matter of the provisional attachment order are forthwith released and defreezed. - Decided in favor of assessee. - Writ Petition No. 8573 of 2015 - - - Dated:- 25-8-2015 - S C Dharmadhikari And B P Colabawalia, JJ. For the Appellant : Mr V Sridharan, Sr Counsel a/w Mr Prakash Shah, Mr Jas Sanghavi, Mr Rahul Thakkar, Mr Puneet Ganapathy For the Respondent Rep by: Mr Vikas Mali, AGP and Mr V A Sonpal, Special Counsel ORDER P. C. This Petition is taken out of turn on account of the urgency pointed out, namely, that by order at Exhibit-A to the Writ P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall be recovered as an arrears of land revenue as per the provisions of Maharashtra Land Revenue Code, 1966 and appropriate legal action will be initiated as per the provisions of law. The dealer shall however, be at liberty to produce any documents, papers or books of accounts and appear before the Joint-Commissioner of Sales Tax (VAT Administration) Pune inperson within 15 days from the service of this order to justify the withdrawal of this order, failing which this order shall be absolute. This order is to remain in operation for 12 months from the date of service on the dealer and may be extended further from time to time for a period of two years. 3. By consent of parties, this Petition is taken up for hearing and final disposal. Respondents through counsel waive service. The Petitioner is a Private Limited Company incorporated under the Indian Companies Act, 1956 and has its registered office at the address mentioned in the cause title. The Petitioner is a registered dealer under the Maharashtra Value Added Tax Act, 2002 (for short MVAT Act, 2002). Respondent Nos.1 to 3 are the State of Maharashtra and their officers exercising statutory powers and discharging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to be produced. Some of the documents were seized. The seized documents are stored in the Petitioner's premises but with a seal. The statements of the various employees of the Petitioner were recorded, and thereafter, the Petitioner was called upon to produce all books of accounts since 1st April, 2011. Thereafter, the Petitioner was required to appear before the Joint Commissioner, but before the Petitioner could prepare itself and meet the case as set up by the Revenue, the Petitioner was informed by the bankers on 24th August, 2015 that there is a communication from the department attaching their bank accounts. 7. It is in that context and disputing the findings in the impugned order that this Petition has been filed and an urgent application was made so as to release the bank accounts from the attachment. 8. Mr Sridharan, learned Senior counsel appearing for the Petitioner submitted before us that the order passed does not take into account that the Petitioner is a solvent company having sufficient assets in the State of Maharashtra. The Petitioner, therefore, cannot be proceeded against on the footing that the interests of the Revenue are jeopardized or that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a frivolous dispute which has been determined by the Commissioner. In the teeth of such overwhelming adverse material, the Petitioner cannot be heard to say that the Joint Commissioner could not have acted in order to protect the interest of the Revenue, was the submission of Mr Sonpal. He therefore submitted that, on merits as well, this Writ Petition be dismissed. 11. Alternatively and without prejudice, Mr Sonpal submits that if this Court is inclined to vacate the impugned order and set aside the same, then, the Petitioner be called upon to furnish bank guarantee to the satisfaction of the Revenue/Department so as to protect its dues. 12. With the assistance of the learned counsel appearing for both sides, we have perused the Petition and all its Annexures. We have perused Section 35 of the MVAT Act,2002. That Section reads as under: 35. Provisional attachment to protect revenue in certain cases: (1) If during the course of inquiry in any proceedings including proceedings related to recovery of any amount due, in respect of any person or dealer or during any inspection or search in relation to the business of any person or dealer under this Act, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (5) shall lie with the Tribunal and all other provisions of section 26 shall apply accordingly. 13. For any action in terms of this section to be taken, firstly there ought to be an inquiry in any proceedings including the proceedings relating to recovery of any amount due. Secondly, that ought to be in respect of any person or dealer. Thirdly, during any inspection or search in relation to any business of any person or dealer under the MVAT Act, 2002, the Commissioner ought to form an opinion that for the purpose of protecting interest of the Revenue, it is necessary to pass an attachment order provisionally. Foundation for the action thus, is the recovery of the amount due and the opinion of the Commissioner that for the purpose of protecting interest of the Revenue, this drastic action is needed. It is not an absolute power and which could be exercised without recording the requisite opinion and on the above material counts. In the present case, we are not impressed by the argument of Mr Sonpal that the Petitioner can be relegated to the remedy provided by subsection 5 of Section 35 and that is of making an application to the Commissioner for modifying or cancelling the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13, then, we do not see what was the occasion to exercise the powers under Section 35. It may be that a search of the premises was conducted and that production and inspection of accounts and documents was directed, and thereafter, the same came to be referred to, but by that itself, and without making any reference to the debatable issues, we do not think that the Commissioner was justified in exercising his powers. There is no basis for holding that the dealers' credentials are doubtful and if coercive action is not initiated immediately, then, the dealer may not discharge the said liability to the exchequer. How or why such an apprehension was not raised from 2011 till date, has not been clarified at all. What was the occasion to act in terms of Section 35 on 21st August 2015, has not been also explained beyond referring to the action under Section 64 of the MVAT Act, 2002. We do not think that the Commissioner needed to exercise this power in order to protect the interest of the Revenue. If the Joint Commissioner was of the opinion that revenue involved is to the tune of more than ₹ 45 Crores, and that is required to be secured, then, he could have ensured security of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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