TMI Blog2021 (4) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) and the only remedy that was available was in the form of the invocation of the writ jurisdiction under Article 226 of the Constitution. The High Court was, therefore, clearly in error in declining to entertain the writ proceedings. The entire procedure which has been followed by the Joint Commissioner in the present case is contrary to the provisions contained in Section 83 read with Rule 159. The Joint Commissioner (acting on behalf of the Commissioner) has proceeded on an understanding that an opportunity of being heard to the person whose property is provisionally attached is a matter of discretion, the discretion of being that of the Commissioner. The Commissioner's understanding that an opportunity of being heard was at the discretion of the Commissioner is therefore flawed and contrary to the provisions of Rule 159(5). There has, hence, been a fundamental breach of the principles of natural justice. We are unable to accept the contention of the respondent that merely because proceedings were pending/concluded against another taxable entity, that is GM Powertech, the powers of Sections 83 could also be attracted against the appellant. This interpretation would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly fair and applied in a fair manner. Each of these three components will need to be addressed in the course of interpreting the tax statute in the present case. 2 This appeal arises from a judgment and order dated 1 January 2021 of a Division Bench of the High Court of Himachal Pradesh. The High Court dismissed the writ petition instituted under Article 226 of the Constitution challenging orders of provisional attachment on the ground that an alternate remedy is available. The appellant challenged the orders issued on 28 October 2020 by the Joint Commissioner of State Taxes and Excise, Parwanoo third respondent provisionally attaching the appellant s receivables from its customers. The provisional attachment was ordered while invoking Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017 HPGST Act and Rule 159 of Himachal Pradesh Goods and Service Tax Rules, 2017 HPGST Rules . While dismissing the writ petition on grounds of maintainability the High Court was of the view that the appellant had an alternative and efficacious remedy of an appeal under Section 107 of the HPGST Act. 3 At issue in this case is whether the orders of provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lent claims of input tax credit ( ITC ) from fake/fictitious firms in Delhi and Kanpur. 7 The appellant received a memo by an e-mail dated 15 December 2018 from the third respondent directing it to be present on 17 December 2018 for explaining the allegedly illegal claim of ITC made during 2017-18 and 2018-19. By its letter dated 17 December 2018, the appellant contended that it had validly claimed ITC as it fulfilled the conditions under Section 16 and other provisions of the HPGST Act and the CGST Act. 8 On 9 January 2019, a notice ( SCN ) was issued to Fujikawa Power, Bagbania, BBN Baddi, one of the customers of the appellant, for provisionally attaching an amount of ₹ 5 crores due to the appellant, under Section 83 of the HPGST Act. On 19 January 2019, the third respondent passed an order of provisional attachment in respect of receivables worth ₹ 5 crores due from Fujikawa Power. This order inadvertently referred to Sarika Industries instead of the appellant. The appellant responded by a representation dated 29 January 2019, claiming inter alia, that the order of attachment was without affording a hearing. The appellant also claimed that on 26 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of State Taxes Excise, South Enforcement Zone, Parwanoo, hereby provisionally attach the payment to the extent of ₹ 5,03,82,554/- of M/s Radha Krishan Industries, Kala-Amb. Henceforth, no payment shall be allowed to be made from your company to M/s RadhaKrishan Industries without the prior permission of this department / office. A similar order was issued to Deepak International, noting that a payment of ₹ 2.91 crores was owed by it to the appellant. 12 On 4 November 2020, the appellant filed a representation and objections against the attachment and denied liability. By an order dated 6 November 2020, the third respondent rejected the objections of the appellant. The third respondent stated that collectively payments only worth ₹ 4.92 crores from both of the appellant s customers were attached. 13 On 27 November 2020, the third respondent issued a notice to show cause to the appellant under Section 74(1) of the HPGST Act for recovering the ITC, interest and penalty. The notice was issued on the basis that the appellant had claimed ITC on the supplies received from GM Powertech and since the inward supplies made by GM Powertech were found to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspect the files for GM Powertech and stated that no documents in this regard had been provided to it in context of the proceedings initiated under Section 74. In response, the third respondent allowed the appellant to inspect the contents of the appellant s case file. According to the respondent, the appellant failed to exercise this option and did not reply to the show cause notice dated 27 November 2020. Thereafter, on 18 February 2021, an order under Section 74(9) of the HPGST Act was passed by the third respondent confirming a tax demand of ₹ 8,30,27,218. This order under Section 74(9) has been assailed by the appellant before the appellate authority under Section 107. The dismissal of the petition challenging the orders of provisional attachment is in question in the present proceedings. B Submissions 19 Mr Puneet Bali, learned senior counsel appearing on behalf of the appellant addressed the following submissions: B.1 Maintainability of the writ petition before the High Court: (i) No efficacious alternative remedy is available against the orders of provisional attachment passed under Section 83 of the HPGST Act. The jurisdiction to pass an order unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nate remedy; (vi) The High Courts should not have dismissed the writ petition on grounds of maintainability if the facts of the case are not disputed by the State as held in Rajasthan State Electricity Board v Union of India 2008 (5) SCC 632 ; and (vii) Reliance was placed on Calcutta Discount Co. Ltd. v Income Tax Officer, Companies District I, Calcutta AIR 1961 SC 372 and Commissioner of Income Tax, Gujarat v M/s A Raman and Co. AIR 1968 SC 49 to argue that the High Court can exercise its powers under Article 226 of the Constitution to issue an order prohibiting the tax officer from proceedings to assess the liability, if the conditions precedent to the exercise of such jurisdiction have not been met. B.2 Challenge on merits: improper invocation of Section 83 (i) The power of provisional attachment under Section 83 of the HPGST Act is a drastic power and must be exercised with extreme care and caution; (ii) The power under Section 83 of the HPGST Act cannot be exercised unless there is sufficient material on record to justify that the assessee is about to dispose of the whole or part of its property to thwart the ultimate collection of tax; (iii) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the HPGST Act does not provide for the percentage of alleged amount to be attached, the powers under this section must be guided by other provisions of the Act; (xv) Under Section 74 of the HPGST Act, once the tax demand becomes payable, an assessee can only challenge this demand in appeal after depositing 10% of the disputed amount and the remaining demand is stayed. In contrast, the provisional attachment of 100% of the alleged amount even before the finalisation of the tax demand is contrary to the legislative intent; (xvi) The third respondent has taken a contradictory stand with respect to collection of tax from the appellant. Even if it is admitted that the transaction between the appellant and GM Powertech was a fake transaction without actual movement of goods, it follows that the appellant cannot claim refund of ITC and nor would the appellant be liable to pay tax on outward supplies. However, the appellant has already paid ₹ 12.49 crores of tax on outward supplies; (xvii) The third respondent has raised a demand of ₹ 39 crores against GM Powertech for illegally availing ITC. Once the tax demand has been confirmed against GM Powertech, refusal to gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the discretion of the Commissioner whether or not to grant an opportunity of a hearing to the appellant; (x) Merely because the appellant has paid ₹ 12 crores of tax, does not imply that the appellant did not engage in the ITC fraud; (xi) There was no violation of the principles of natural justice as an order of provisional attachment does not require a prior notice to be issued to the assessee; (xii) The necessary prerequisites for triggering Section 83 of the HPGST Act were complied with; (xiii) The appellant had not sought any prior stay on the orders of provisional attachment and thus, it is not conceivable that the business of the appellant has become paralyzed due to these orders; (xiv) The provisional attachment is not only for the purpose of recovery, but is intended to safeguard the interests of the revenue while the proceedings are pending; and (xv) The legislature did not provide any quantum or percentage for the purpose of provisional attachment under Section 83 of the Act. Thus, a comparison with other provisions of the HPGST Act, including Section 107, is incorrect. C Legal Position 21 The following issues arise in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for any other purpose . 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law; (v) When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion; and (vi) In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with. 28 These principles have been consistently upheld by this Court in Seth Chand Ratan v Pandit Durga Prasad (2003) 5 SCC 399 , Babubhai Muljibhai Patel v Nandlal Khodidas Barot (1974) 2 SCC 706 and Rajasthan SEB v. Union of India, (2008) 5 SCC 632 amon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [internal citation omitted]. 31 A body of precedent has emerged in the High Courts on the exercise of the power under Section 83 of the CGST Act (akin to the State GST Act SGST Act ). The shared learning which emerges from these decisions of the High Court needs recognition. In Valerius Industries v Union of India 2019 (30) GSTL 15 (Gujarat) , the Gujarat High Court laid down the principles for the construction of Section 83 of the SGST/CGST Act. The High Court noted that a provisional attachment on the basis of a subjective satisfaction, absent any cogent or credible material, constitutes malice in law. It further outlined the principles for the exercise of the power: 52. [ ] 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 it is necessary to protect the interest of revenue. However, the subjective satisfaction should be based on some credible materials or information It is not any and every material, howsoever vague and indefinite or distant, remote or far-fetching, which would warrant the formation of the belief. (1) The power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, howsoever laudable that may be. The High Court further held, that on his opinion being challenged, the competent officer must be able to show the material on the basis of which the belief is formed. 33 In Patran Steel Rolling Mill v Assistant Commissioner of State Tax Unit 2 2019 (20) GSTL 732 (Gujarat) , the Gujarat High Court cited two instances in which provisional attachment would be apposite, these being where the assessee is a fly by night operator and if the assessee will not be able to pay its dues after assessment. 34 Similar to the decisions of the Gujarat High Court, other High Courts have recognized the restrictive nature of the power of provisional attachment under Section 83 of the SGST Act and the need for it to be based on adequate substantive material. The High Courts have also underscored the extraordinary nature of this power, necessitating due caution in its exercise. (Bindal Smelting Private Limited v Addl. Director General of GST Intelligence, 2020 (34 G.S.T.L 592 (P H); Society for Integrated Development of Urban and Rural Areas v Commissioner of Income Tax, A.P. II, Hyd, 2001 (252) ITR 642; Vinod Kumar Murlidhar Prop. Of Chechani Trading Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 159(2), and the form GST DRC-22 show that a proceeding has to be initiated against a specific taxable person, an opinion has to be formed that to protect the interest of Revenue an order of provisional attachment is necessary. The format of the order, i.e. the form GST DRC-22 also specifies the particulars of a registered taxable person and which proceedings have been launched against the aforesaid taxable person indicating a nexus between the proceedings to be initiated against a taxable person and provisional attachment of bank account of such taxable person. ( emphasis supplied ) C.3 Delegation of authority under CGST Act 38 The learned counsel for the respondent State, during the course of his submissions, has also sought to justify the delegation of powers by the Commissioner to the Joint Commissioner by way of the impugned notification dated 21 October 2020 for the purpose of attachment of properties under Section 83 of the HPGST Act. In this regard, reliance was placed on Nathanlal Maganlal Chauhan v State of Gujarat, 2020 SCC Online Guj 1811 where the Gujarat High Court was considering the validity of a notification by which the Commissioner of State Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o order a provisional attachment under Section 83 of the HPGST Act is construed. Before interpreting it, the provision is extracted below for convenience of reference: 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 Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1). 40 The marginal note to Section 83 provides some indication of Parliamentary intent. Section 83 provides for provisional attachment to protect revenue in certain cases . The first point to note is that the attachment is provisional provisional in the sense that it is in aid of something else. The second point to note is that the purpose is to protect the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must be in writing; (v) The provisional attachment which is contemplated is of any property including a bank account belonging to the taxable person; and (vi) The manner in which a provisional attachment is levied must be specified in the rules made pursuant to the provisions of the statute. 42 Under sub-Section (2) of Section 83, a provisional attachment ceases to have effect upon the expiry of a period of one year of the order being passed under sub-Section (1). The power to levy a provisional attachment has been entrusted to the Commissioner during the pendency of proceedings under Sections 62, 63, 64, 67, 73 or as the case may be, Section 74. Section 62 contains provisions for assessment for non-filing of returns. Section 63 provides for assessment of unregistered persons. Section 64 contains provisions for summary assessment. Section 67 elucidates provisions for inspection, search and seizure. Before we dwell on Section 74, it would be material to note the provisions of Section 70 which are extracted below: 70. Power to summon persons to give evidence and produce documents. - (1) The proper officer under this Act shall have powers to summon any person whose atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilful mis-statement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax alongwith 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 sub-section (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 sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under sub-section (1) pays the said tax alongwith interest payable under section 50 and a penalty equivale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to show cause for the recovery of tax, interest payable under Section 50 and the penalty equivalent to the amount of tax specified in the notice. Sub-Sections (2), (3) and (4) lay down procedural provisions which are to be followed by the proper officer. Secondly, under sub-Section (5) of Section 74, before the service of a notice under sub-Section (1), the person who is chargeable with tax may pay the tax together with interest and a penalty equivalent to fifteen per cent of the tax on the basis of their own ascertainment of the tax or as ascertained by the proper officer and inform the proper officer of the payment having been made upon receipt of the information. Sub-Section (6) stipulates that the proper officer shall not serve any notice under sub-Section (1) in respect of the tax so paid or any penalty payable under the provisions of the Act or the Rules. 47 On the other hand, when the proper officer is of the opinion that the amount which has been paid under sub-Section (5) falls short of the amount which is actually payable, a notice under sub-Section (1) is to issue for the amount which falls short of what is actually payable. Sub-Section (8) contains a stipulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f protecting the interest of the government revenue; fourth, the issuance of an order in writing for the attachment of any property of the taxable person; and fifth, the observance by the Commissioner of the provisions contained in the rules in regard to the manner of attachment. Each of these components of the statute are integral to a valid exercise of power. In other words, when the exercise of the power is challenged, the validity of its exercise will depend on a strict and punctilious observance of the statutory pre-conditions by the Commissioner. While conditioning the exercise of the power on the formation of an opinion by the Commissioner that for the purpose of protecting the interest of the government revenue, it is necessary so to do , it is evident that the statute has not left the formation of opinion to an unguided subjective discretion of the Commissioner. The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of the government revenue. 49 By utilizing the expression it is necessary so to do the legislature has evinced an intent that an attachment is authorized not merely because it is expedient to do so (or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any proceedings of assessment or reassessment of turnover escaping assessment, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may by order in writing attach provisionally any property belonging to the dealer in such manner as may be prescribed. ) of the Gujarat Value Added Tax Act 2003, one of us (Hon ble Mr Justice MR Shah) speaking for a Division Bench of the Gujarat High Court in Vishwanath Realtor v State of Gujarat Special Civil No. 7210 of 2015, decided on 29 April 2015 observed: 8.3. Section 45 of the VAT Act confers powers upon the Commissioner to pass the order of provisional attachment of any property belonging to the dealer during the pendency of any proceedings of assessment or reassessment of turnover escaping assessment. However, the order of provisional attachment can be passed by the Commissioner when the Commissioner is of the opinion that for the purpose of protecting the interest of the Government Revenue, it is necessary so to do. Therefore, before passing the order of provisional attachment, there must be an opinion formed by the Commissioner that for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r effecting a provisional attachment of property. Rule 159 provides thus : 159. Publication of information in respect of persons in certain cases. - (1) If the Commissioner, or any other officer authorised by him in this behalf, is of the opinion that it is necessary or expedient in the public interest to publish the name of any person and any other particulars relating to any proceedings or prosecution under this Act in respect of such person, it may cause to be published such name and particulars in such manner as it thinks fit. (2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for presenting an appeal to the Appellate Authority under section 107 has expired without an appeal having been presented or the appeal, if presented, has been disposed of. Explanation. - In the case of firm, company or other association of persons, the names of the partners of the firm, directors, managing agents, secretaries and treasurers or managers of the company, or the members of the association, as the case may be, may also be published if, in the opinion of the Commissioner, or any other officer authorised by him in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person whose property is attached is entitled to two procedural entitlements: first, the right to submit an objection on the ground that the property was not or is not liable to be attached; and second, an opportunity of being heard to the person filing an objection. This is a clear indicator that in addition the filing of an objection, the person whose property is attached is entitled to an opportunity of being heard. It is not open to the Commissioner, as has been stated in the present case, to hold the view that the only safeguard under sub-Rule 5 is to submit an objection without an opportunity of a personal hearing. Such a construction would be plainly contrary to sub-Rule 5 which contemplates both the submission of an objection to the attachment and an opportunity of being heard. The opportunity of being heard can be availed of as a matter of right by the person whose property is attached. Both the right to submit an objection and to be afforded an opportunity of being heard are valuable safeguards. The consequence of a provisional attachment is serious. It displaces the person whose property is attached from dealing with the property. Where a bank account is attached, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to a determination of whether the petition under Article 226 was maintainable and if it was, whether Commissioner exercised the powers under Section 83 read with Rule 159 in accordance with law. 57 The material facts for making this determination need to be recapitulated. On 3 October 2018, a memo was issued under Section 70 (incorrectly referring to the provisions of Section 74) by the Joint Commissioner of State Taxes and Excise directing the appellant to appear on 9 October 2018 along with specific documents pertaining to the years 2017-18 and 2018-19. The notice stated that in the event that the appellant failed to appear, the Commissioner would be constrained to issue a notice to show cause under Section 74(1). On 9 October 2018, two partners of the appellant attended the hearing. On 10 October 2018, a detection case under Section 74 of the HPGST Act and CGST Act read with Section 20 of the IGST Act was initiated against a supplier of the appellant, GM Power Tech by a search and seizure operation conducted under Section 67. On 15 October 2018, the partners of the appellant attended the case hearing and provided certain documents which were required by the department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Pradesh delegated, in pursuance of the provisions of Section 5(3) the powers vested under Section 83(1) inter alia to the Joint Commissioner of State Taxes and Excise. On 28 October 2020, a fresh order was issued under Section 83 stating that proceedings were initiated against the appellant under Section 74 since it was found to be involved in an ITC fraud of ₹ 5.03 crores during 2017-18 and 2018-19. Since a GST fraud case had been initiated against GM Powertech on whom a demand had been raised, the ITC claimed by the appellant against supplies effected by GM Powertech was held to be inadmissible resulting in a provisional attachment of the payments due to the appellant to the extent of ₹ 5,03,82,554/-. A similar order was issued on 28 October 2020 under Section 83 to M/s Deepak International Limited. The appellant submitted a detailed representation under Rule 159 (5) to the Joint Commissioner. The representation was rejected on 6 November 2020 without affording an opportunity of being heard. Thereafter, on 27 November 2020, a notice to show cause was issued to the appellant under Section 74(1) recording that the appellant had shown inward supplies of lead ingots fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le against a decision or order passed under the HPGST Act or CGST Act by an adjudicating authority . Sub-Section (2) similarly provides that: (2) The Commissioner may, on his own motion, or upon request from the Commissioner of central tax, call for and examine the record of any proceeding in which an adjudicating authority has passed any decision or order under this Act or the Central Goods and Services Tax Act, 2017 (No.12 of 2017) for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order. Sub-Section (2) confers a revisional power on the Commissioner in regard to the legality or propriety of a decision or order passed by an adjudicating authority. The expression adjudicating authority is defined by Section 2(4) in the following terms: (4) adjudicating authority means any authority, appointed or authorized to pass any order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had filed objections, then any opportunity of hearing was the discretion of the Ld. Commissioner. 64 This understanding of the Commissioner is in the teeth of and clearly contrary to the provisions of Rule 159(5). Rule 159(5), as explained earlier contemplates two safeguards to the person whose property is attached. Firstly, it permits such a person to submit objections to the order of attachment on the ground that the property was or is not liable for attachment. Secondly, Rule 159(5) posits an opportunity of being heard. Both requirements are cumulative. The Commissioner's understanding that an opportunity of being heard was at the discretion of the Commissioner is therefore flawed and contrary to the provisions of Rule 159(5). There has, hence, been a fundamental breach of the principles of natural justice. 65 On 28 October 2020, the following order was recorded in the file noting by the Joint Commissioner purporting to justify the levy of a provisional attachment : 66 Ex facie, the above order passed by the Joint Commissioner does not indicate any basis for the formation of the opinion that the levy of a provisional attachment was necessary to protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be pendency of proceedings under the relevant provisions mentioned above against the taxable person whose property is sought to be attached. We are unable to accept the contention of the respondent that merely because proceedings were pending/concluded against another taxable entity, that is GM Powertech, the powers of Sections 83 could also be attracted against the appellant. This interpretation would be an expansion of a draconian power such as that contained in Section 83, which must necessarily be interpreted restrictively. Given that there were no pending proceedings against the appellant, the mere fact that proceedings under Section 74 had concluded against GM Powertech, would not satisfy the requirements of Section 83. Thus, the order of provisional attachment was ultra vires Section 83 of the Act. 69 On 1 March 2021, the appellant has filed an appeal under Section 107 together with a deposit of ₹ 32,15,488 representing ten per cent of the tax due. Section 107(6) contains the following stipulation: (6) No appeal shall be filed under sub-section (1), unless the appellant has paid- (a) in full, such part of the amount of tax, interest, fine, fee and penalty ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is without jurisdiction. The High Court has not considered this aspect. Both the earlier and the subsequent orders of provisional attachment are on the same grounds. Therefore, unless there was a change in the circumstances, it was not open for the Joint Commissioner to pass another order of provisional attachment, after the earlier order of provisional attachment was withdrawn after considering the representations made by the petitioner. This is an additional ground to set aside the subsequent order of provisional attachment. E Summary of findings 72 For the above reasons, we hold and conclude 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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