𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧
The provisional attachment provided in section 83 of the GST Act has always been a subject matter of improper exercise of jurisdiction. In one of the cases, the immovable property worth more than Rs. 10 crores was provisionally attached for an amount of Rs. 3.50 lacs (inclusive of interest and penalty). On a writ being filed, the Hon’ble court did not appreciate the substance of the matter in a way it was supposed to be. [Refer 𝐅𝐨𝐫𝐦𝐚𝐭𝐢𝐯𝐞 𝐅𝐚𝐬𝐡𝐢𝐨𝐧𝐬 𝐏𝐯𝐭. 𝐋𝐭𝐝. 𝐕𝐞𝐫𝐬𝐮𝐬 𝐒𝐭𝐚𝐭𝐞 𝐨𝐟 𝐆𝐮𝐣𝐚𝐫𝐚𝐭 – 𝐑/𝐒𝐂𝐀 𝐍𝐨. 𝟏𝟑𝟖𝟕𝟖 𝐨𝐟 𝟐𝟎𝟐𝟎].
𝐖𝐡𝐚𝐭 𝐜𝐨𝐮𝐥𝐝 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐝𝐨𝐧𝐞?
In our view, the court should have perused the facts on pedestal of:
𝐀. 𝐑𝐞𝐚𝐬𝐨𝐧𝐬 𝐭𝐨 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 which encompass within it following essential ingredients:
- The use of the word “𝐦𝐚𝐲” 𝐢𝐧𝐝𝐢𝐜𝐚𝐭𝐞𝐬 𝐧𝐨𝐭 𝐨𝐧𝐥𝐲 𝐭𝐡𝐞 𝐝𝐢𝐬𝐜𝐫𝐞𝐭𝐢𝐨𝐧, 𝐛𝐮𝐭 𝐚𝐧 𝐨𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧 to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue.
- It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But 𝐢𝐟 𝐢𝐭 𝐢𝐬 𝐜𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐝 that he had no reasons to believe, in that case, 𝐡𝐞 𝐦𝐮𝐬𝐭 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞 𝐭𝐡𝐞 𝐦𝐚𝐭𝐞𝐫𝐢𝐚𝐥𝐬 𝐮𝐩𝐨𝐧 𝐰𝐡𝐢𝐜𝐡 𝐡𝐢𝐬 𝐛𝐞𝐥𝐢𝐞𝐟 𝐰𝐚𝐬 𝐟𝐨𝐫𝐦𝐞𝐝, as it has been held by the Supreme Court in Sheonath Singh’s case [AIR 1971 SC 2451].
𝐁. 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐭𝐡𝐞 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐨𝐧 𝐭𝐡𝐞 𝐨𝐧𝐞 𝐡𝐚𝐧𝐝 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐞𝐚𝐥𝐞𝐫 𝐨𝐧 𝐭𝐡𝐞 𝐨𝐭𝐡𝐞𝐫 𝐡𝐚𝐧𝐝 as clarified in the case of Patran steel Rolling Mill Vs. Assistant Commissioner of State Tax, 2019 (20) GSTL 732.
𝐂𝐨𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧
Mystifying to all those seeking plausible answers to the imborglio of provisional attachment, we also fail to understand what could have been the reasons to form such an opinion. Hope, Hon’ble Commissioner will drop this order while doing periodic review. Seeking a solution to executive indulging in such needless exercise of jurisdiction, the government come out with an instruction dated 23.02.2021 providing for guidelines of provisional attachment. Let’s see how far these instructions are followed to achieve the balance of interest.