Mindlogicx Infratec Limited vs. Office Of The Deputy Commissioner Of Commercial Taxes

Facts

The petitioner, Mindlogicx Infratec Limited, filed a writ petition challenging orders of attachment of its receivables issued by the Deputy Commissioner of Commercial Taxes. These attachments were made pursuant to an adjudication order dated March 3, 2023, which assessed GST payable for FY 2017-18 at Rs. 52,18,878/-, along with interest of Rs. 1,52,02,600/- and penalty of Rs. 5,21,888/-, totaling Rs. 2,09,43,366/-. The petitioner had already paid Rs. 50,00,000/- towards this demand, leaving a balance of Rs. 1,59,43,360/-. The petitioner sought to quash the attachment orders and also requested payment of the balance amount in three installments. During the proceedings, the petitioner filed an undertaking affidavit.

Held

The Court took note of the undertaking affidavit filed by the petitioner. It was held that the orders of attachment at Annexures-H to L would stand vacated. However, the order of attachment of Sant Gadge Baba Amravati University at Annexure-M would continue for a period of 90 days, within which the petitioner must pay the sum of Rs. 1,59,43,360/- as undertaken. The Court made it clear that there would be no further extension of time. In the event of any default in payment, the deponent would be liable for contempt of court proceedings, and the respondent would be at liberty to initiate recovery proceedings. The attachment at Annexure-M would be lifted upon full payment within the stipulated 90 days. The writ petition was disposed of in light of these directions.

Key Issues

1. Whether the orders of attachment of receivables issued by the respondent under Section 79(1)(c) of the KGST Act, 2017 read with Rule 145(1) of the KGST Rules, 2017 are valid and justified in light of the petitioner's undertaking to pay the outstanding dues. Petitioner's contention: The petitioner, through its Director, filed an undertaking affidavit agreeing to pay the balance amount of Rs. 1,59,43,360/- within 90 days from the date of the affidavit (i.e., on or before October 3, 2023). Based on this undertaking, the petitioner sought the vacation of most attachment orders, with one attachment to continue until payment. The petitioner relied on the principle of resolving tax disputes through payment and adherence to court-directed timelines. Respondent's contention: The respondent, represented by the Additional Government Advocate, submitted that the affidavit must be strictly adhered to, with stipulations for default. The respondent did not present any arguments against the petitioner's proposal but emphasized the need for compliance with the undertaking.