TMI Blog2019 (9) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... egated to the three subordinate officers referred to above by virtue of the order dated 15th January 2018 passed in exercise of power under subsection (3) of Section 5 read with clause 19 of Section 2 of the Act and the rules framed thereunder. In our opinion, the answer has to be in the negative. Although there is no specific challenge to the order dated 15th January 2015 passed by the Commissioner of State Tax delegating his power under Section 83 to the subordinate officers, yet, we are of the view that by virtue of such order, such impugned order of provisional attachment cannot be defended. In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law. Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probably cause. Any use of discretionary power exercised for an unauthorized purpose amounts to malice in law. It is immaterial whether the authority acted in go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y RPAD (R)(66) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1 Rule returnable forthwith. Ms. Maithili Mehta, the learned Assistant Government Pleader waives service of notice of rule for and on behalf of the respondents. 2 By this writ application under Article 226 of the Constitution of India, the writ applicant a partnership has prayed for the following reliefs: ( A) Your Lordships may kindly be pleased to issue a writ of certiorari or an appropriate writ, orders, directions and thereby be pleased to quash and set aside the order dated 17.06.2019, passed by the respondent No.4 Commercial Tax Officer at Vadodara, Gujarat in reference No.ZA2406190010233 whereby the petitioner is demanded to pay the total amount of ₹ 1,60,79,302/-; ( B) Your Lordships may kindly be pleased to issue a writ of certiorari or an appropriate writ, orders, directions and thereby be pleased to quash and set aside the orders of provisional attachment of the stock of goods, amounting ₹ 1,60,00,000/- dated 27.11.2018 and the orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST Act, 2017. 4 The case of the writ applicant, as pleaded in the writ application, is as follows: 2.1 The petitioner is a partnership firm and therefore the present petition is filed by its partner, who has been authorized to be the legal representative of the firm to perform and act all the legal representation, who is the national and citizen of India and hence he is entitled to the fundamental and civil rights guaranteed under the Constitution of India. 2.2 The petitioner respectfully states that the petitioner firm is engaged in the business of purchasing and selling the material of copper whereby the scrap material of copper is purchased by the firm and the same is being melted and converted into the copper pipes before selling it into the market. The petitioner firm is registered with the GST department with GSTIN No. 24AANFV4191NIZH. 2.3. The petitioner respectfully states that according to the business practice, the petitioner firm has purchased the copper scrap material from the Various firms/companies, which is volumed as 291538.38 kilograms, amounting ₹ 15,51,00,399/- in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of hearing and explaining, the executives of the petitioner s firm were served with the order of provisional attachment of the petitioner s current account bearing' A/C No. 01880200001055 and FD/RD CC A/C No. 01880500000081, registered at Bank of Baroda, Alkapuri Branch, Vadodara, passed kar the State Tax Officer at Vadodara, Gujarat in reference No. AC/U44/ STo1/Va1erius/201819, whereby the aforementioned accounts are provisionally attached under the provisions of Gujarat GST Act, 2017 and the transactions of the accounts are completely restrained. However, the bank has denied the attachment of the CC A/C No. 01880500000081 as it is not the asset of the petitioner firm. 2.8 That on 27.11.2018, the respondent No. 13 had again raided the premises of the petitioner firm and seized the sales and purchase register and files and Bank/RTGS files. Further, on the very same day, the petitioner firm was served with summons under Section 70 of Central GST Act, 2017 whereby the legal representative of the firm was directed to remain present on 18.12.2018. However, he was not allowed to explain to aforementioned transaction of sales and purchases and the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input tax credit without issue of any show cause notice is illegal and contrary to Section 74 of the GST Act. ● SUBMISSIONS ON BEHALF OF THE RESPONDENTS: 6 Ms. Mehta, the learned A.G.P. has vehemently opposed this writ application. She submitted that no error, not to speak of any error of law could be said to have been committed by the respondents Nos.3 and 4 in passing the impugned orders. Ms. Mehta submitted that Section 83 of the Act, 2017 undoubtedly provides that during the pendency of any proceeding under Sections 62, 63, 64, 67 and 73 or Section 74, as the case may be, the Commissioner has the power to pass an order of provisional attachment if he is of the opinion that it is necessary to do so for the purpose of protecting the interest of the government revenue. Ms. Mehta submitted that although the power has been conferred by the statute upon the Commissioner and the satisfaction has to be of the Commissioner, yet, by order dated 15th January 2018 bearing No.GSLS-5( 1)-S-83B14, the Commissioner of State Tax, Gujarat State, Ahmedabad has delegated his power under Section 83 conferred upon him by the statute to : (1) Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in manufacture and quantitative details of the goods shown manufacture including the waste and by products thereof, the petitioner herein has not maintained such books of account and therefore, there is contravention to the provisions of the CGST/GGST Act, 2017 with an intention to evade payment of tax. It is also respectfully submitted that, upon perusal of the form GST INSOZ in paragraph no.2 of the said order of seizure. It is categorically mentioned that the petitioner has not received any physical goods as per the said invoices and the petitioner has availed credit fraudulently. It is further observed in the seizure order that, some of the transactions shown in the books as well as return of the petitioners are found fictitious and only billing activities/papers trails without entering into Physical transactions of goods has been undertaken. 9 It is respectfully submitted that, the summon was issued on 27.11.2018, and the bearing Was kept on 18.12.2018, the petitioner had Visited the office and the statement was recorded on 18.12.2018 . Upon perusal of the said statement in question no.20, 21 and 29. It is categorically mentioned that upon asking of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service of a notice under section 46, the proper officer may proceed to assess the tax liability of the said person to the best of his judgement taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. ( 2) Where the registered person furnishes a valid return within thirty days of the service of the assessment order under subsection (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under subsection (1) of section 50 or for payment of late fee under section 47 shall continue. 10 Section 63 of the Act, 2017 reads as follows: 63. Assessment of unregistered persons. Notwithstanding anything to the contrary contained in section 73 or section 74, where a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under subsection (2) of section 29 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act; or ( b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of State tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. ( 2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under subsection (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of State tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceeding six months. ( 8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under subsection (2), be disposed of by the proper officer in such manner as may be prescribed. ( 9) Where any goods, being goods specified under subsection (8), have been seized by a proper officer, or any officer authorised by him under subsection (2), he shall prepare an inventory of such goods in such manner as may be prescribed. ( 10) The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that subsection (5) of section 165 of the said Code shall have effect as if for the word Magistrate , wherever it occurs, the word Commissioner were substituted. ( 11) Where the proper officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection (1), on the person chargeable with tax. ( 4) The service of such statement shall be deemed to be service of notice on such person under subsection (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. ( 5) The person chargeable with tax may, before service of notice under subsection (1) or, as the case may be, the statement under subsection (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. ( 6) The proper officer, on receipt of such information, shall not serve any notice under subsection (1) or, as the case may be, the statement under subsection (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. ( 2) The proper officer shall issue the notice under subsection (1) at least six months prior to the time limit specified in subsection (10) for issuance of order. ( 3) Where a notice has been issued for any period under subsection (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under subsection (1), on the person chargeable with tax. ( 4) The service of statement under subsection (3) shall be deemed to be service of notice under subsection (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilfulmisstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not include proceedings under section 132; ( ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded. Explanation 2. For the purposes of this Act, the expression suppression shall mean nondeclaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer. 15 Section 83 of the Act, 2017, which is relevant for our purpose, reads as under: 83. Provisional attachment to protect revenue in certain cases. ( 1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the department, it has come to my notice that the said person has Current Account No 01880200001055 FD RD CC Account No.01880500000081 account in your bank. In order to protect the interests of revenue and in exercise of the powers conferred under section 83 of the Act, R R Bhatiya, State Tax Officer 1, Unit44, Vadodara, hereby provisionally attach the aforesaid account / property. No debit shall be allowed to be made from the said account or any other account operated by the aforesaid person on the same PAN without the prior permission of this department. The property mentioned above shall not be allowed to be disposed of without the prior permission of this department. Sd/- ( R.R. Bhatiya) State Tax Officer 1, Unit 44, Vadodara. 18 The order of provisional attachment of the goods valued at ₹ 1,60,00,000/- reads as under: Details of goods seized: M/s Valerius Industries 26/1 G.I.D.C. Industrial Estate, Kalol, Dist: Panchamahal GSTN:24AANFV4191N1ZH The process of site inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.R.Bhatiya) State Tax Officer1 Unit6, Vadodara 19 We shall now look into the order passed by the Commissioner of State Tax delegating his power of provisional attachment under Section 83 of the Act to : (1) Deputy Commissioner (2) Assistant Commissioner and (3) State Tax Officer. The order reads as under: ORDER By the Commissioner of State Tax, Gujarat State, Ahmedabad Dated the 15 January, 2018 No.GSL/S.5(1)/S.83/B.14 Specification of proper officers under the Gujarat Goods and Services Tax Act, 2017 In exercise of the power conferred upon me by subsection of section 5 read with clause (91) of section 2 of the Gujarat Goods and Services Tax Act, 2017 and the rules framed thereunder, I do hereby assign the functions to be performed under this Act by a proper officer as defined in clause (91) of section 2 under different sections of the said Act mentioned in the entry in column (2) of the Schedule below and described in the corresponding entry at column (3) of the said Schedule to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 According to Ms. Mehta, by virtue of Section 5(3) of the Act, the Commissioner is empowered to delegate his power to any other officer who is subordinate to him. 22 Ms. Mehta, thereafter, invited the attention of this Court to two definitions of Commissioner and Commissioner in the Board as defined under Sections 2(24) and 2(25) respectively of the Gujarat Goods and Services Tax Act, 2017. The two definitions read as under: 2(24). Commissioner means the Commissioner of State tax appointed under section 3 and includes the Chief Commissioner or Principal Commissioner of State tax appointed under section 3; 2(25). Commissioner in the Board means the Commissioner referred to in section 168 of the Central Goods and Services Tax Act; 23 Ms. Mehta, thereafter, invited the attention of this Court to Section 167 of the Gujarat Goods and Services Tax Act, 2017 (fort short, 'the GGST Act, 2017), which is with regard to the delegation of powers. Section 167 of the GGST Act, 2017 reads as under: The Commissioner may, by notification, direct that subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 168. (1) The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions. ( 2) The Commissioner specified in clause (91) of section 2, subsection (3) of section 5, clause (b) of subsection (9) of section 25, subsections (3) and (4) of section 35, subsection (1) of section 37, subsection (2) of section 38, subsection (6) of section 39, subsection (5) of section 66, subsection (1) of section 143, subsection (1) of section 151, clause (l) of subsection (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. 30 The comparison of the provisions of the State GST Act and the CGST would indicate that there is a vast difference between the two. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usting, by a person or body of persons, of the exercise of a power residing in that person or body of persons, to another person or body of persons, with complete power of revocation or amendment remaining in the grantor or delegator. It is important to grasp the implications of this, for, much confusion of thought has unfortunately resulted from assuming that delegation involves or may involve, the complete abdication or abrogation of a power. This is precluded by the definition. Delegation often involves the granting of discretionary authority to another, but such authority is purely derivative. The ultimate power always remains in the delegator and is never renounced. 32 As a general rule, whatever a person has power to do himself, he may do by means of an agent. This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegated, delegatus non potest delegare. The naming of a delegate to do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him and there is a presumption that he is required to do the act himself and cannot redelegate hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of protecting the interest of the government revenue. We are afraid we are not in a position to accept this argument. 34 The first and the foremost thing which needs to be noted is that even for the purpose of Section 67, the satisfaction has to be of the proper officer not below the rank of the Joint Commissioner. If the proper officer not below the rank of the Joint Commissioner has reasons to believe that a taxable person has indulged in contravention of any of the provisions of the Act, 2017 or the rules, then in such circumstances, he may authorize in writing any other officer to carry out the inspection, search and seizure. Therefore, when an authorized officer carries out an inspection, search and seizure, the same is merely on the basis of the satisfaction recorded or arrived at by the proper officer not below the rank of the Joint Commissioner. The authorized officer is merely executing or implementing the order that may be passed by the proper officer not below the rank of the Joint Commissioner for the purpose of Section 67 of the Act, 2017. 35 In the case on hand, Section 83 makes it abundantly clear that it is the Commissioner& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subjective, must be based on some credible material disclosing that is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue. The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings. Belief is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed, as it has been held by the Supreme Court in Sheonath Singh's case [AIR 1971 SC 2451], that the Court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court. In the case at hand, Ms. Mehta, the learned A.G.P. appearing for the respondents very fairly submitted that not only the impugned order of provisional attachment is bereft of any reason, but there is nothing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n authorities that the expressions is satisfied , is of the opinion and has reason to believe are indicative of subjective satisfaction, though it is true that the nature of the power has to be determined on a totality of consideration of all the relevant provisions. The Supreme Court while construing Section 237 of the Companies Act, 1956 held : 64. The object of S. 237 is to safeguard the interests of those dealing with a company by providing for an investigation where the management is so conducted as to jeopardize those interests or where a company is floated for a fraudulent or an unlawful object. Clause (a) does not create any difficulty as investigation is instituted either at the wishes of the company itself expressed through a special resolution or through an order of the court where a judicial process intervenes. Clause (b), on the other hand, leaves directing an investigation to the subjective opinion of the government or the Board. Since the legislature enacted S. 637 (i) (a) it knew that government would entrust to the Board its power under S. 237 (b). Could the legislature have left without any restraints or limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board of Trade will always exercise its discretionary power in the light of specified grounds for an appointment on their own motion and that they may be trusted not to appoint unless the circumstances warrant it but they will test the need on the basis of public and commercial morality. There must therefore exist circumstances which in the opinion of the Authority suggest what has been set out in subclauses (i), (ii) or (iii). If it is shown that the circumstances do not exist or that they are such that it is impossible for any one to form an opinion therefrom suggestive of the aforesaid things, the opinion is challengeable on the ground of nonapplication of mind or perversity or on the ground that it was formed on collateral grounds and was beyond the scope of the statute. 39 The Supreme Court while expressly referring to the expressions such as reason to believe , in the opinion of observed : Therefore, the words, reason to believe or in the opinion of do not always lead to the construction that the process of entertaining reason to believe or the opinion is an altogether subjective to process not lending itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' which read as under : The common theme of all the authorities so far mentioned is that the notion of absolute or unfettered discretion is rejected. Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely that is to say, it can validly be used only in the right and proper way which Parliament when conferring it is presumed to have intended. Although the Crown's lawyers have argued in numerous cases that unrestricted permissive language confers unfettered discretion, the truth is that, in a system based on the rule of law, unfettered governmental discretion is a contradiction in terms. The real question is whether the discretion is wide or narrow, and where the legal line is to be drawn. For this purpose everything depends upon the true intent and meaning of the empowering Act. The powers of public authorities are therefore essentially different from those of private persons. A man making his will may, subject to any rights of his dependents, dispose of his property just as he may wish. He may act out of malice or a spirit of revenge, but in law this does not affect his exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is so clearly unreasonable that what is done under such a mistaken belief might almost be said to have been done in bad faith; and in actual experience and as things go, they may well be said to run into one another. The influence of extraneous matters will be undoubtedly there where the authority making the order has admitted their influence. An administrative order which is based on reasons of fact which do not exist must be held to be infected with an abuse of power. We may also refer to and rely upon a decision of the Supreme Court in the case of ITO Calcutta vs. Lakhmani Mewal Das reported in [ ( 1976) 103 ITR 437 (SC)] wherein it had been held as under: The reasons for the formation of the belief contemplated by Section 147(a) of the Income-tax Act, 1961, for the reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the I.T.O. and the formation of his belief that there has been escapement of the income of the assessee from assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve at the satisfaction that it is necessary to provisionally attach the property for the purpose of protecting the interest of the government revenue. The power has been specifically conferred upon the Commissioner to form such an opinion. The legislature was quite alive to the fact that an order of provisional attachment cannot be as a matter of course. It is one of the drastic measures which the authority may be compelled to take if the situation demands for the purpose of protecting the interest of the government revenue. Under Section 67 of the Act, 2017, the legislature has thought fit to use the words proper officer not below the rank of Joint Commissioner . In Section 83, even that discretion is taken away and it is only the Commissioner who has been empowered to act under Section 83 of the Act. In our opinion, therefore, the subjective satisfaction, which is required for the purpose of Section 83 of the Act, is not dependent on Section 67 of the Act or to put it in other words, just because, a search has been undertaken resulting in seizure of goods by itself may not be sufficient to arrive at the subjective satisfaction that it is necessary to pass an order of provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. ( 6) The proper officer, on receipt of such information, shall not serve any notice under subsection (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. ( 7) Where the proper officer is of the opinion that the amount paid under subsection (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in subsection (1) in respect of such amount which falls short of the amount actually payable. ( 8) Where any person chargeable with tax under subsection (1) pays the said tax along with interest payable under section 50 and a penalty equivalent to twenty five per cent. of such tax within thirty days of issue of the notice, all proceedings in respect of the said notice shall be deemed to be concluded. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 5) Notwithstanding anything to the contrary contained in this Act, any amount of input tax credit reversed prior to the appointed day shall not be admissible as input tax credit under this Act. 48 It appears from the materials on record that without issue of any show cause notice, the tax liability came to be determined under Section 74 of the Act. Section 74 makes it abundantly clear that the defaulter should be called upon to show cause as to why he should not be paid the amount specified in the notice along with the interest payable thereon. There could not have been any assessment under Section 74 of the Act without giving any opportunity of hearing to the writ applicant. In such circumstances, the order is not tenable in law and deserves to be quashed and set aside. We also fail to understand as to on what basis the input tax credit could have been blocked by way of computer entry. At the most, the same could have been ordered to be provisionally attached, but how could the same have been blocked. Such action is also not sustainable in law. 49 Section 83 of the Act, 2017 is in pari materia with the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue, he may accept such guarantee and revoke the attachment. ( 4) The Assessing Officer may, for the purposes of determining the value of the property provisionally attached under head (1 ), make a reference to the Valuation Officer referred to in the provision of the lncomeTax Act, 1961 who shall estimate the fair market value of the property in the manner provided under that provision and submit a report of the estimate to the Assessing Officer within a period of thirty days from the date of receipt of such reference. ( 5) An order revoking the provisional attachment under head (3) shall be made ( a) within forty five days from the date of receipt of the guarantee, where a reference to the Valuation Officer has been made under head (4); or (b) within fifteen days from the date of receipt of guarantee in any other cases. ( 6) Where a notice of demand specifying a sum payable is served upon the assessee and the assessee fails to pay that sum within the time specified In the notice of demand, the Assessing Officer may invoke the guarantee furnished under head (3) wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only if there is a reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment. It should therefore be exercised with extreme care and caution. Moreover. power under this provision is to be exercised only if there is sufficient material on record to justify satisfaction that assessee is about to dispose of whole or any part of his property with a view to thwarting ultimate collection of demand and in order to achieve said objective attachment should be of properties and to extent it is required to achieve this object. It should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee. Attachment of bank accounts and trading assets should be resorted to only as a last resort. In any event, attachment under this provision should not be equated with attachment in the course of recovery proceedings. In the event the revenue is adequately protected by attachment, there is no justification for Assessing Officer for making an order of demand directing assessee to deposit entire demand within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging order of assessment within time period prescribed under the provision of the IncomeTax Act, 1961 dealing with appealable orders along with a stay application, Assessing Officer cannot not pass an order of attachment in terms of this provision during pendency of said appeal. When property, which' is subject matter of provisional attachment, is sufficient to satisfy tax liability and safeguard interest of revenue, petitioner can seek release of provisional attachment in respect of other properties and amounts due from debtors and depositors. 51 Thus, although the provisions of Section 281B of the Income Tax Act is pari materia to Section 83 of the State GST Act, yet one pertinent feature of Section 281B of the Income Tax Act is that it gives guidelines for making the provisional attachment. Such guidelines are missing so far as Section 83 of the State GST Act is concerned. 52 Our final conclusions may be summarized as under: [ 1] The order of provisional attachment before the assessment order is made, may be justified if the assessing authority or any other authority empowered in law is of the opinion that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the authority may not be justified in invoking its power under Section 83 of the Act for the purpose of provisional attachment. 53 In the overall view of the matter, we are convinced that the respondents have not acted in accordance with law. 54 In such circumstances referred to above, this writ application succeeds and is hereby allowed. The assessment order dated 17th June 2019 passed by the respondent No.4 Commercial Tax Officer at Vadodara demanding total amount of ₹ 1,60,79,302/- towards tax, penalty and interest is hereby quashed and set aside. However, it is clarified that if the authority wants to proceed against the writ applicant under Section 74 of the Act, then it shall be open for the authority to do so after issuing appropriate show cause notice and give an opportunity of hearing to the writ applicant. 55 The order of provisional attachment of the stock of goods amounting to ₹ 1,60,00,000/- dated 27th November 2018 as well as the order of provisional attachment of the writ applicant's current account bearing account No.01880200001055 and FD/RD CC account No.01880500000081 registered at the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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