M/S Radha Krishan Industries vs. State Of Himachal Pradesh & Ors.

Held

The Supreme Court held that the Joint Commissioner, in ordering provisional attachment under Section 83, was acting as a delegate of the Commissioner under Section 5(3), and therefore, an appeal under Section 107(1) was not available. Consequently, the writ petition before the High Court was maintainable, and the High Court erred in dismissing it on grounds of alternative remedy. The Court found a clear non-application of mind by the Joint Commissioner to Section 83, rendering the attachment illegal. It also held that there was a breach of the mandatory requirements of Rule 159(5), including the entitlement to submit objections and an opportunity of being heard, and that the Commissioner's belief of having discretion on granting a hearing was misconceived. Furthermore, the Court noted that with a final order passed under Section 74, proceedings under Section 74 were no longer pending, and the provisional attachment must cease. The Court also observed that subsequent orders of provisional attachment were issued on the same grounds without a change in circumstances, making them ultra vires Section 83. The appeal was allowed, and the High Court's judgment and the orders of provisional attachment were set aside.

Facts

The appellant, M/s Radha Krishan Industries, challenged orders of provisional attachment of its receivables issued by the Joint Commissioner under Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017. These orders were passed during proceedings initiated against the appellant's supplier for GST fraud. The appellant filed a writ petition before the High Court, which was dismissed on the grounds that an alternative and efficacious remedy of appeal under Section 107 was available. The appellant contended that the Joint Commissioner, acting as a delegate of the Commissioner, had improperly exercised the power under Section 83, violating procedural safeguards and acting without pending proceedings against the appellant. The amount in dispute was not explicitly stated, but the challenge concerned the attachment of receivables.

Key Issues

1. Whether a writ petition under Article 226 of the Constitution challenging an order of provisional attachment under Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017, is maintainable when an appeal under Section 107 is available? The petitioner argued that the Joint Commissioner was acting as a delegate and an appeal under Section 107(1) was not available against such an order, making the writ petition the only remedy. The Revenue contended that Section 107 provided an alternative and efficacious remedy, thus barring the writ petition. 2. Whether the Joint Commissioner properly exercised the power of provisional attachment under Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017? The petitioner argued there was a non-application of mind to Section 83, a breach of mandatory Rule 159(5) regarding objections and an opportunity of being heard, and that no proceedings were pending against the appellant. The Revenue's arguments on this issue are not explicitly recorded, but their defense of the provisional attachment orders would imply they contended the exercise of power was valid.