TMI Blog2021 (11) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of the Government revenue. In addition to the aforesaid mandatory requirements, before passing the provisional attachment order, it is also incumbent upon the authorities to come to a conclusion based on the tangible material that without attaching the provisional attachment, it is not possible in the facts of the given case to protect the revenue and that the provisional attachment order is completely warranted for the purpose of protecting the Government revenue. Applying the principles laid down in Radha Krishan s case [ 2021 (4) TMI 837 - SUPREME COURT] to the facts of the instant case, a perusal of the impugned provisional attachment order will clearly indicate that except for merely stating that since there is a likelihood of huge tax payments to be raised on completion of assessment and that for the purpose of protecting the revenue, it is necessary to provisionally attach the fixed deposit of the petitioners, the other mandatory requirements and pre-condition as laid down by the Apex Court have neither been complied with nor fulfilled or followed prior to passing the impugned order. It is apparent that the impugned provisional attachment orders at Annexures- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1961, assessment proceedings are said to have been initiated under Section 153-A of the Act by the respondents. During the course of the said proceedings, respondent No.1 has proceeded to pass the impugned orders at Annexure-D, D1, D2 and D3, thereby provisionally attaching the fixed deposit of the petitioners by invoking Section 281(B) of the said Act, which is the subject matter of challenge in the present petition. 4. In addition to reiterating the various contentions urged in the Memorandum of Petition and referring to the documents produced by the petitioners, learned Senior counsel for the petitioners invited my attention to paragraph No.2 of the impugned order in order to contend that the necessary mandatory requirements and parameters as required in law to be followed by respondent No.1 prior to passing the provisional attachment order had not been complied with in as much as no reasons are assigned and no satisfaction is recorded and neither valid nor cogent reasons are stated as to why the provisional order of attachment was essential to be passed against the petitioners. In support of his submissions, learned senior counsel for the petitioners places reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 preconditions 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. 50. 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 profitable or practicable for the revenue to do so) but because it is necessary to do s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 purpose of protecting the interest of the Government Revenue during the pendency of any proceedings of assessment or reassessment, it is necessary to attach provisionally any property belonging to the dealer. However, such satisfaction must be on some tangible material on objective facts with the Commissioner. In a given case, on the basis of the past conduct of the dealer and on the basis of some reliable information that the dealer is likely to defeat the claim of the Revenue in case any order is passed against the dealer under the VAT Act and/or the dealer is likely to sale his prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal attachment for the purpose of protecting the interest of the government revenue; (viii) In the facts of the present case, there was a clear non-application of mind by the Joint Commissioner to the provisions of Section 83, rendering the provisional attachment illegal; (ix) Under the provisions of Rule 159(5), the person whose property is attached is entitled to dual procedural safeguards: (a) An entitlement to submit objections on the ground that the property was or is not liable to attachment; and (b) An opportunity of being heard; There has been a breach of the mandatory requirement of Rule 159(5) and the Commissioner was clearly misconceived in law in coming into conclusion that he had a discretion on whether or not to grant an opportunity of being heard; (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; (xi) A final order having been passed under Section 74(9), the proceedings under Section 74 are no longer pending as a result of which the provisional attachment must come to an end; and (xii) The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attach the fixed deposit of the petitioners, the other mandatory requirements and pre-condition as laid down by the Apex Court have neither been complied with nor fulfilled or followed prior to passing the impugned order. It is apparent that the impugned provisional attachment orders at Annexures-D, D1, D2 and D3 do not satisfy the legal requirements as laid down in Radha Krishan s case (supra) and consequently, in view of the fact that the impugned provisional orders are cryptic, unreasoned, non-speaking and laconic, the same deserve to be quashed. 10. In so far as the apprehension of the respondents that in the event huge tax payments are to be raised as against the petitioners-assessee, the assessee may not make payment of the same causing loss to the revenue is concerned, in the light of the undisputed fact that the proceedings under Section 153-A of the said Act of 1961 have already been initiated coupled with the fact that Section 281 of the said Act of 1961, contemplates that any alienation of any property belonging to the petitioners would be null and void, in addition to the specific assertion made by the petitioner that they own and possess immovable property to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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