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TMI Blog2021 (10) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been issued to the Branch Manager, Indian Bank/R3, there was no appearance for the Bank. 3. In short, the case of the petitioner is that the impugned attachment under Section 83 of the CGST Act is without any statutory sanction as it is consequent upon action under Section 67 of the Act, which deals with the power of the authorities to engage in inspection, search and seizure. The scope of Section 87 is wholly based upon the 'opinion' of the concerned Commissioner to the effect that the interests of the revenue were to be safeguarded and sanctioning coercive recovery proceedings of the nature of bank attachment in a particular case. 4. The Head Office of the petitioner was subject to proceedings for inspection, search and seizure by R2 and other officials of the Intelligence Wing on 09.01.2020. A Mahazar was drawn and various materials including files and a pendrive, seized. With this, proceedings under Section 67 have been, according to the petitioner, concluded. This aspect of the matter is not disputed by the respondents. Section 67 provides exhaustively for the procedure to be engaged in and carried out by officials of GST Intelligence to search the premises of the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second and more pertinent question that remains for determination is as to whether the 'opinion' of the Commissioner in this case, is based upon a legitimate and legal apprehension that the interests of the revenue required to be protected. I had on 05.07.2021, thus recorded as follows: Heard both learned counsel in brief. 2. The question to be answered is as to whether the Commissioner has recorded his opinion, as required statutorily under Section 83 of the Central Goods and Services Tax Act, 2017 (Act) prior to the attachment of the petitioner's bank accounts on 23.11.2020. In the impugned order attaching the bank accounts, the Principal Additional Director General (commensurate with the Commissioner) states that the attachment is 'in order to protect the interest of revenue'. However, this apprehension should be supported by the recording of the reasons on the basis of which he comes to such conclusion. 3. List on 14.07.2021 within the first five matters after admission. Records to be produced. 9. In response, Mr.Sundareswaran has filed a compilation dated 16.07.2021, containing two documents. The first is a copy of the note sheet proceedings of the Senior I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the same day by R1 in the following terms: 'Since the said firms have been found to have availed fraudulent ITC passed on by bogus firms and are involved in availment of and passing on of fraudulent ITC. Bank accounts may be attached to protect revenue.' 13. The error committed by R2, as noted by me in the preceding paragraphs, has been perpetrated by R1, whose 'opinion', as above, also proceeds on the firm conviction that the claim of ITC by the petitioner is fraudulent and emanated from bogus, non-existent firms. His opinion, based upon which the impugned proceedings have been taken is wholly non-speaking, makes no reference to materials, if any, found in the course of the Investigation and the reasoning upon which he arrives at the conclusion that the petitioner's bank account is to be attached. 14. Thereafter, on 09.12.2020, R2 proposes to call upon the firms from which the petitioner claims to be engaged in business, to enquire and verify whether the claim of ITC was proper. There is no flaw or error in this, as R2 is well within his domain to cause enquiry in this regard. The sequence of events as narrated above would show that a conclusion and determination of liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledged for the units mentioned in serial numbers 1 to 9. On the basis of the aforesaid materials, revenue would argue that there was more than enough justification for the impugned attachment proceedings. 17. The petitioner, in this regard, relies upon four decisions, three of the Gujarat High Court and one of Bombay High Court as follows: (i) Valerius Industries V. Union of India (R/Special Civil Application No.13132 of 2019 dated 28.08.2019) (ii) Pranit HEM Desai V. Additional Director General and another (2020 6 GSTL 15) (iii) Kushal Ltd. V. Union of India (R/Special Civil Application No.19533 of 2019 dated 17.12.2019) (iv) Kaish Impex Limited V. The Union of India and others (W.P.No,.3145 of 2019 dated 17.01.2020) 18. In Valerius Industries (supra) the challenge was to an order of assessment passed under the provisions of the Gujarat Goods and Services Tax Act, 2017 (in short 'Gujarat GST Act') and an order of provisional attachment of that petitioner's bank account. The Court examined in detail the Scheme of the Gujarat GST Act concluding as follows: 52 Our final conclusions may be summarized as under: [1] The order of provisional attachment before the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n invoking its power under Section 83 of the Act for the purpose of provisional attachment. 19. The Writ Petition came to be allowed and the impugned order/demand set aside granting liberty to the parties to proceed against that petitioner under Section 74 of the Gujarat GST Act, if so appropriate. The order of provisional attachment upon the stock of goods as well as the petitioner's bank accounts was quashed. 20. In the case of Pranit HEM Desai (supra) a similar issue was discussed by the same Bench of the Gujarat High Court, which reiterated its earlier view in the cases of Valerius Industries (supra), M/s Patran Steel Rolling Mill vs Assistant Commissioner of State Tax, Unit 2 (65 GSTR 177) and the decision of the Bombay High Court in the case of Gandhi Trading v. Asst. CIT ((1999) 239 ITR 337 Bom.) The discussion at paragraphs 6, 7 and 8 of their decision in Patran Steel Rolling Mill (supra) has been extracted as follows: "6 From the facts as emerging on record, it appears that the tax liability of the petitioner in terms of the goods seized as well as the transporter's statement, the same would not exceed Rs. 13,00,000/. The petitioner has already deposited a sum of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concerned authorities that while exercising powers under section 83 of The GGST Act, the authorities should try to balance the interest of the Government revenue as well as a dealer to ensure that while the interest of the revenue is safeguarded, the dealer is also in a position to continue with his business, because it is only if the dealer continues with the business that he would generate more revenue. The authorities should keep in mind that bringing the business of a dealer to a halt does not in any manner serve the interest of the revenue. Therefore, while taking action under section 83 or 67(2) of the GGST Act, the concerned authorities should take care to ensure that equities are maintained and while securing the interest of the revenue, they should attempt to see that the dealer is in a position to continue with the business. This court does not intend to lay down any absolute proposition that in no case drastic action should be taken, but that the respondents should consider the background and history of the dealer as well as his financial position to ascertain as to whether or not he would otherwise be in a position to pay the dues that may be assessed upon the culmina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y concerned must justify the invocation of the coercive and intrusive recovery proceedings against the assessee, even prior to determination of liability and passing of an assessment order. The burden that lies upon the revenue is heavy and has to be seen to be discharged by them in a proper manner in each and every case where power under Section 83 is invoked. 25. The Hon'ble Supreme Court in a recent judgment in the case of M/s.Radhakrishnan Industries V. State of Himachal Pradesh and others (Civil Appeal No.1155 of 2021 dated 20.04.2021) dealt with very similar circumstances as before me now, setting aside the proceedings for bank attachment noticing that the discharge of the condition under Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017 was, in that case insufficient. The Hon'ble Bench perused the records minutely and has extracted from the opinion of the sanctioning authority, finding it lacking. The Hon'ble Court was of the view that the opinion neither disclosed any tangible material nor did it reveal any basis for the formation of the opinion that a provisional attachment was necessary to safeguard the interests of the revenue to justify invocation of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (x) The Commissioner is duty bound to deal with the objections to the attachment by passing a reasoned order which must be communicated to the taxable person whose property is attached; ................ 26. I extract the opinion of the sanctioning authority in the case of M/s Radhakrishna (supra) that was found inadequate by the Hon'ble Supreme Court that may be compared with the opinion of the Commissioner in the present case, to illustrate the degree of woeful inadequacy/lacunae in the present case. 28.10.2020: The case of M/s.G.M.Powertech, Kala-Amb (H.P.) GSTIN: 02AARFG98301Z7 has been decided under Section 74 of the HPGST/CGST Acts, 2017 and an additional demand of Rs. 39 Crores has been created on account of fake/fraudulent claim of input tax credit. The above mentioned orders have been passed for the financial years 2017-18 and 2018-19. As per evidences available in the case of M/s.G.M.Powertech, Kala-Amb it has been established that M/s.G.M.Powertech claimed/utilized input tax credit in contravention of various provisions of the HPGST/the CGST Acts, 2017. After illegal accumulation of input tax credit, M/s.G.M.Powertech, Kala-Amb passed on the same to various R.T.P' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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