To Harass Assessee Power Should Not Be Used as a Tool as in Section 83
[Ref: As in the matter of Pranit Hem Desai vs Additional Director-General on 28 August 2019 before DB bench of Gujarat High Court]
It is submitted that for the aim of passing any order of provisionary attachment under Section 83 of the Act, the pendency of the proceedings under the Section 62 or Section 63 or Section 64 or Section 67 or Section 73, or Section 74 is must be applied. Within the absence of any such unfinished proceedings, there can not be any order of provisionary attachment under Section 83 of the CGST Act, 2017.
The DB of Gujarat High court in Pranit Hem Desai vs Additional Director-General on 28 August 2019 ascertained that power u/s 83 ought to neither be used as a tool to harass the assessee nor ought to or not it’s employed in a way that can have an irreversible prejudicious result on the business of the assessee.
Within the same matter, the Court ordered that ‘all the six judicial writ applications succeed and herewith allowed. The orders of provisionary attachment of the bank accounts of the judicial writ candidates herewith quashed and put aside.’
Facts within the same matter:-
The Petitioner submitted that for the aim of passing certain order of provisionary attachment under Section 83 of the Act, it absolutely was earlier shown that the proceedings under the Section 74 of the Act had been initiated and were unfinished. As per the petitioner, a similar was altogether not correct. It absolutely was submitted that before long because it was dropped at the respondent that no proceedings under the Section 74 had been initiated, and thus, there couldn’t be the provisionary attachment under the Section 83 of the Act rather than passing an acceptable order lifting the provisionary attachment, the respondent went to the extent of correcting its mistake by supplying a corrigendum. By issuing a mistake, the respondent processed that rather than Section 74, Section 67 ought to be read. Consistent with the petitioner, this can be not permissible in law. to place it in alternative words, such a mistake isn’t reasonable by law.
The second submission of the Petitioner is that it’s solely the Commissioner who has a right to pass an order of conditional attachment under Section 83 of the Act. Within the case at hand, the impugned order of conditional attachment under the Section 83 has been gone by the Additional Director General DGGI AZU, Ahmedabad.
The Petitioner more submitted that notwithstanding the error is declared to be legal and valid, no proceedings under Section 67 of the Act were unfinished as on the date the order of conditional attachment under Section 83 of the Act came to be passed. Petitioner tried to develop this argument more by submitting that no products were confiscated from the premises of the writ candidates. The proceedings under the Section 67 of the Act may be aforementioned to be unfinished as long as the products are confiscated from the premises of the writ candidates.
The Petitioner, within the last, submitted that Section 83 of the Act may be invoked for the aim of passing a conditional attachment provided the Commissioner is subjectively glad on the premise of the materials on record that it’s necessary to try and do therefore to guard the interest of the government revenue. Therefore, the subjective satisfaction that the interest of the government revenue must be protected is of prime importance. Petitioner submitted that having relation to the materials on record, the interest of the government revenue may be aforementioned to be fully secured.
The Respondent submitted that there’s no benefit within the submission canvassed on behalf of the writ applicant for the error earlier committed by the respondent couldn’t are corrected by certain corrigendum. It’s more submitted that having realized that the proceedings under Section 67 of the Act were unfinished and not under Section 74, the error was in real-time issued. No fault may be found for such a mistake. it’s additionally more submitted that the respondent is equal in rank with the Commissioner, and thus, it can’t be argued that the Additional Director General DGGI AZU had no authority to invoke Section 83 of the Act. The third submission of Ms. Mehta is that cogent reasons are appointed by respondent No.1 within the order overruling the objections dated 30th Apr 2019.
Having heard about the learned counsel showing for the parties and having knowledge of the materials on record, the sole question that the Hon’ble Court has thought of is whether or not the respondent was even invoking Section 83 of the Act for the aim of passing a certain order of attachment of the bank accounts. Consequently, the DB of Gujarat High Court within the aforementioned matter ascertained within the Para No. 28 & 29 as under-
“28. Section 83 of the State GST Act empowers the Assessing Authority to form a conditional attachment of any property of the assessee throughout the pendency of any continuing the assessment or revaluation of any turnover, despite the fact that there’s no demand outstanding against the assessee if he’s of the opinion that it’s necessary to try and do therefore to guard the interest of the revenue. This provision has been created, in our opinion, so as to guard the interest of the revenue in cases wherever the raising of demand is probably going to require time due to the investigations and there’s apprehension that the assessee could default the last word assortment of the demand. In different words, Section 83 provides an influence to be exercised throughout the pendency of any continuing assessment or revaluation, in order that the assessee might not deplete or secrete his resources out of the reach of the Business Tax department once the assessment or revaluation is completed. The expression “for the aim of protecting the interest of the revenue” occurring in Section 83 of the Act is extremely wide in its means. Further, the orders of conditional attachment should be in writing. There should be some material on record to point that the Assessing Authority had shaped a specific opinion on the premise thence that it absolutely was necessary to connect the property so as to guard the interest of the revenue. The conditional attachment provided under section 83 is added to the attachment before judgment under the Code of Civil Procedure. It has a liability on the property. However, the ability bestowed upon the Assessing Authority under the Section 83 is extremely forceful, so much reaching power which power should be used meagerly and solely on substantive weighty grounds and for valid reasons. To make sure that this power isn’t misused, no safeguards are provided within Section 83. One issue is evident that this power ought to be exercised by the Authority as long as there’s an inexpensive apprehension that the assessee could default the last word assortment of the demand that’s seeming to be raised on completion of the assessment. It should, therefore, be exercised with extreme care and circumspection. It shouldn’t be exercised unless there’s adequate material on record to justify the satisfaction that the assessee is near to losing the complete or any a part of his property with a read to thwarting the last word assortment of the demand. Moreover, attachment ought to be the product of the properties and to the extent, it’s needed to realize the higher than the object. It ought to neither be used as a tool to harass the assessee nor ought to it’s employed in a way that can have an irreversible prejudicious result on the business of the assessee.
29. The Bombay High court in Gandhi Trading v. Asst. CIT 3 reported in (1999) 239 ITR 337 Bom. has opined that the attachment ought to be created, as way as potential, of the immobile properties if which will defend the Revenue. The attachment of bank accounts and all of the trading assets ought to be resorted to solely as a final resort as a result, the attachment of the bank accounts of the assessee would paralyze the functions and business of the assessee. The Authority, therefore, ought to exercise the facility given to him under Section 83 of the Act with circumspection and fairly. No exhausting and quick rule may be arranged down on however and under what circumstances the facility under the Section 83 may be invoked by the Authority. The discretion given to the Authority shall be dropped at bear having respect to the facts and circumstances of every case. It’s not permissible for the Authority to equate the provisionary attachment envisaged under Section 83 of the Act with attachment within the course of the recovery proceedings.
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