TMI Blog2022 (5) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC-23. Admittedly, except saying that the orders of provisional attachment are passed in order to protect the interest of the Government revenue, no other reasons are assigned by the fourth respondent in the impugned orders of provisional attachment. When sub-Rule (5) of Rule 159 of the Rules specifically provides for filing objections against the orders of provisional attachment, the contention that the reasons for ordering provisional attachment were recorded in the Note File and that there is no need to extract the same or state the same in the provisional order of attachment, in the considered opinion of this Court, cannot stand for judicial scrutiny. This Court is of the opinion that the petitioner has made out prima facie case for grant of interim relief - there shall be interim suspension of the provisional attachment orders, dated 01.04.2022 and 06.04.2022, till 15.07.2022. Post the matter for hearing on 05.07.2022. - MAIN CASE No.W.P.No.12360 of 2022 - - - Dated:- 6-5-2022 - Honourable Sri Jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Civil, Application (For stay) No.01 of 2020 in R/Special Civil Application No.9822 of 2020), dated 01.10.2020. On the contrary, learned Government Pleader, strongly resisting the Writ Petition, contends that there is absolutely no illegality nor there exists any procedural infirmity in the impugned action and, in the absence of the same, invocation of the jurisdiction of this Court, under Article 226 of the Constitution of India, is impermissible. It is further submitted by the learned Government Pleader that the fourth respondent herein, after recording valid reasons, in the Note File, with an intention to protect the interest of the Government revenue, issued the impugned provisional order of attachment of the bank accounts of the petitioner. It is also the submission of the learned Government Pleader that there is absolutely no necessity to mention the particulars of all the reasons in the provisional orders of attachment and the same would be evident from the language employed in Section 83 of the Act and Rule 159 of the Rules framed thereunder. In order to consider the issue in the present Writ Petition, reference to the provisions of Section 83 of the Act is necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exercise of the PART D power by employing specific statutory language which conditions the exercise of the power. The language of the statute indicates first, the necessity of the formation of opinion by the Commissioner; second, the formation of opinion before ordering a provisional attachment; third the existence of opinion that it is necessary so to do for the purpose of 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 opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al attachment the Commissioner must in the formation of the opinion act on the basis of tangible material on the PART D basis of which the formation of opinion is based in regard to the existence of the statutory requirement. While dealing with a similar provision contained in Section 4536 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 Gujarat37 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 purpose of protecting the interest of the Government Revenue during the pendency of any proceedings of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of the property which is attached. The form in which the order is to be made is prescribed in form GST DRC-22. This form is extracted below: PART D 54. Under sub-Rule (5) of Rule 159, the person whose property is attached is allowed seven days time to file an objection that the property attached was or is not liable to attachment . Sub-Rule (5) stipulates that the Commissioner may after affording an opportunity of being heard to the person filing the objection release the property by an order in form GSTDRC-23. Similarly, under sub-Rule PART D (6) upon being satisfied that the property was or is no longer liable to be attached, the Commissioner is empowered to release the property by issuing an order in Form GST DRC- 23 for the releasing of the property under attachment. The Form is extracted below : 55. A significant aspect of Rule 159(5) is that upon the levy of a provisional attachment, the person whose property is attached is empowered to file an objection within seven days on the ground that the property was or is not liable to attachment. In using the expression was or is no longer liable for attachment , PART D the delegate of the legislature has comprehend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for the purpose of business. The dual procedural safeguards inserted in sub- Rule 5 of Rule 159 demand strict compliance. The Commissioner who hears the objections must pass a reasoned order either accepting or rejecting the objections. To allow the Commissioner to get by without passing a reasoned order will make his decision subjective and defeat the purpose of subjecting it to judicial scrutiny. The Commissioner must deal with the objections and pass a reasoned order indicating whether, and if not, why the objections are not being accepted. Sub- Rule 6 of Rule 159 allows for the release of a property which either was or is no longer liable for attachment. The form in which such an order has to be passed, namely form GST DRC-23, states that now there is no such proceeding pending against the defaulting person which warrants attachment of the account or as the case may be, the property. Sub- Rules 5 and 6 do not expressly contemplate a situation in which the person PART D whose property is attached can object on the ground that the attachment is in excess of the amount likely to be due for which proceedings have been launched under the Act. Nor does it provide for a spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which one of us J.B. Pardiwala, J. was a party, had the occasion to discuss Section 83 of the Act in the case of Valerius Industries vs. Union of India, Special Civil Application No.13132 of 2019, decided on 28th August, 2019, wherein this Court drew the following conclusion: [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 it is necessary to protect the interest of revenue. However, the subjective satisfaction should be based on some credible materials or information and also should be supported by supervening factor. 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. [2] The power conferred upon the authority under Section 83 of the Act for provisional attachment could be termed as a very drastic and far reaching power. Such power should be used sparingly and only on substantive weighty grounds and reasons. [3] The power of provisional attachment under Section 83 of the Act should be exercised by the authority only if there is a reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this context, it may be appropriate to refer to the provisions of Rule 159 of the Sales Tax Rules. According to sub-Rule (5) of Rule 159 of the Rules, the assessee may, within seven days of the attachment under sub-Rule (1), file an objection to the effect that the property attached was or is not liable to attachment before the Commissioner and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC-23. Admittedly, except saying that the orders of provisional attachment are passed in order to protect the interest of the Government revenue, no other reasons are assigned by the fourth respondent in the impugned orders of provisional attachment. When sub-Rule (5) of Rule 159 of the Rules specifically provides for filing objections against the orders of provisional attachment, the contention that the reasons for ordering provisional attachment were recorded in the Note File and that there is no need to extract the same or state the same in the provisional order of attachment, in the considered opinion of this Court, cannot stand for judicial scrutiny. The Hon ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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