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2019-VIL-443-GUJ

SGST High Court Cases

GST - Sections 62, 63, 64, 67, 73, 74 & 83 - writ application challenging the impugned order raising demand of demanding tax, penalty and interest - writ applicant also seeks to challenge the action of blockage of the input tax, provisional attachment of the stock of goods, provisional attachment of its Bank Accounts in exercise of powers under Section 83 of the CGST Act, 2017 – whether the Commissioner could have delegated his power of provisional attachment under Section 83 of the Act and whether by virue of order delegating the power of the Commissioner of State Tax, the State Tax Officer could be said to be empowered to pass the impugned order of provisional attachment of property and bank accounts under Section 83 of the Act – HELD – Although there is no specific challenge to the order passed by the Commissioner of State Tax delegating his power under Section 83 to the subordinate officers, yet, by virtue of such order, the impugned order of provisional attachment cannot be defended - 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 - The power of provisional attachment under Section 83 of the Act should be exercised by the authority 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 - The power under Section 83 of the Act for provisional attachment should be exercised only if there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of wholly or any part of his/her property with a view to thwarting the ultimate collection of demand and in order to achieve the said objective, the attachment should be of the properties and to that extent, it is required to achieve this objective - The power under Section 83 of the Act 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 - The attachment of bank account and trading assets should be resorted to only as a last resort or measure. The provisional attachment under Section 83 of the Act should not be equated with the attachment in the course of the recovery proceedings - The authority before exercising power under Section 83 of the Act for provisional attachment should take into consideration two things: (i) whether it is a revenue neutral situation (ii) the statement of “output liability or input credit”. Having regard to the amount paid by reversing the input tax credit if the interest of the revenue is sufficiently secured, then the authority may not be justified in invoking its power under Section 83 of the Act for the purpose of provisional attachment - In the overall view of the matter, we are convinced that the respondents have not acted in accordance with law – The assessment order demanding tax, penalty and interest is quashed and set aside – the writ application succeeds and is allowed

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