The Gujarat High Court bench of Justice J.B. Pardiwala and Justice Nisha M. Thakore has ruled that the provisional attachment must not lay the burden on the normal business activities of the taxable person.
The petitioner is involved in the business of manufacturing and selling ingots and has a factory located near Rajkot Gujrat state. The taxpayer has been duly enrolled under the GST act.
The taxpayer has availed to pose the regularly paid output tax for the 3 fiscal years. The taxpayer has come into the business transaction through the real dealers who were enrolled taxable individuals beneath the GST act. Moreover, the assessee has placed on record, and regularly maintained records of purchase transactions, including invoices, GST e-way bills, weighment slips, photographs of materials being unloaded, and a material receiving inspection report.
The office of the Deputy Commissioner of State Tax, Vadodara, presumed that the taxpayer has shown the buyings via bogus companies in which the additional non-existent. The respondent or the department has started the proceedings with respect to the taxpayer in which an investigation was made at the business premises of the writ petitioner under the process as mentioned beneath section 67 of the GST act.
The issues have been raised with respect to the ITC claimed via taxpayer on the basis of the company from whom the taxpayer’s purchases are genuine.
The taxpayer specified that apart from the properties, the council has indeed seized the mobile phone, laptop, and other documents from the business premises of the writ applicants through passing the seizure order. The taxpayer has made the representation which is being obeyed by the next reminders, however, there was no answer. In the same situation, the writ applicants have asked the court with the writ application asking for the relief.
By assuming, the taxpayer has submitted that the interest of the revenue would be saved, for the demand which might arise when all this might be safe by levying the conditions or at least allowing the taxpayer to function the Demat account and the present account and the provisional attachment qua the stock of goods be raised.
The taxpayer urged the court to acknowledge the prayer for the return of the electronic devices, along with the mobile, phones, laptops, and documents seized in the search proceedings and confirmed not to dispose of the electronic items and documents so seized and has proposed to keep all items in its original form.
The council specified that the taxpayer looks to be involved in the fake billing through coming into purchase transactions through the 15 suspicious firms. While the investigation is under the process either found non-existent at the business place or the owners are not traceable, and the firms are in the name of individuals of no means, and the owners are not conscious of these alleged business activities. The taxpayer who claimed the ITC was worth Rs 4.73 cr whose outcome is tax theft. As of the date the total tax theft comprises the penalty and the interest arises to Rs 10.76 cr.
The court depended on the decision of the Gujarat High Court in the case of Valerius Industries Vs. Union of India where it was ruled that the empowerment of the provisional attachment beneath section 83 of the Gujarat Goods and Services Tax Act, 2017 must be practiced by the council when there is a cause of doubt that the taxpayer might default on the collection of the demand that seems to be raised on the finish of the assessment the same would be practiced with the case and caution.
The court mentioned that the power provided beneath section 83 of the Gujarat Goods and Services Tax Act, 2017 must not be practiced to harass the taxpayer not it must be used in a manner that can pose an irreversible negative impact on the assessee’s business.
The court refused the order of the provisional attachment qua the stock of goods, the two Demat accounts, and the present account of the writ applicants.
“So far the prayer of the writ applicants with regard to release of electronic items including Mobile Phone, laptop and other documents seized during the search proceedings are concerned, same is also directed to be released forthwith on condition that the writ applicants shall file an undertaking before the respondent thereby declaring that the aforesaid goods electronic items including mobile phone, laptop and other seized documents shall be retained in its original form and shall not be disposed of pending the investigation, if any. At the same time, we permit the respondent authoritie to secure the original data by availing necessary certificates under Section 65B of the Information and Technology Act,” the court said.”
