M/S. Psts Logistics PVT.LTD. vs. The Commissioner Of CGST And Central Excise
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The petitioners, M/s.PSTS Logistics Private Limited and M/s.PSTS Heavy Lift and Shift Limited, filed writ petitions challenging orders attaching their bank accounts. The attachment was issued by the Commissioner of CGST & Central Excise, Madurai, due to the petitioners' inability to discharge their tax liability under the Goods and Services Tax Act, 2017, reportedly caused by a loss of Rs. 50,00,00,000/- in one of their centres. The petitioners sought to quash these orders and requested permission to remit their tax liability through monthly installments. They had previously offered security, but the respondent declined, citing prior charges and ownership issues.
Held
The Court, considering the petitioners' willingness to pay a consolidated amount of Rs. 25,00,000/- per month towards their tax liability, was inclined to quash the impugned orders and remit the case back to the respondent. The Court directed the petitioners to submit a fresh representation with their offer and any additional security to protect the revenue's interest by 02.05.2006. The respondent was instructed to pass a speaking order on this representation as expeditiously as possible, preferably by 13.05.2022, to enable the petitioners to meet their financial obligations, including salary payments. The Court emphasized that this order would be effective only after the respondent disposes of the petitioner's representation. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the attachment of bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017, is a drastic measure that should be used sparingly and only on substantive grounds. 2. Whether the Court should direct the respondent to permit the petitioners to remit their tax liability through monthly installments. Petitioner's Arguments: The petitioners argued that the attachment of bank accounts under Section 83 is a drastic measure, citing the Supreme Court's decision in Radha Krishnan Industries Vs State of Himachal Pradesh and others, which upheld the Gujarat High Court's view in Valerius Industries Vs Union of India. They contended that this power should be exercised sparingly and on substantive grounds. They also submitted that they are a going concern with good business prospects and are willing to liquidate their tax liability by paying a consolidated amount of Rs. 25,00,000/- per month. Respondent's Arguments: The judgment does not record specific arguments from the respondent regarding the legal validity of the attachment or the installment payment request. The respondent's prior action of declining offered security is noted.
Sections Cited
Section 83
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Before: and
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Heard the learned counsel for the petitioners and the learned Junior Standing Counsel for the respondent.
The petitioner's group of Companies had allegedly suffered loss in one of its centre to an extent of Rs.50,00,00,000/- as a result of which the petitioner was unable to discharge tax liability under the Goods and Services Tax Act, 2017. Under these circumstances, the respondent attached a bank account of the respective petitioner by issuing GST DRC Form, dated 18.02.2022 and 22.02.2022. 2/4 https://hcservices.ecourts.gov.in/hcservices/
W.P(MD).Nos.4779 and 4780 of 2022
The learned counsel for the petitioners submits that the petitioners will liquidate the tax liability over a period of time and therefore, the petitioners be given one more opportunity as petitioners are a going concern and have good business in the Logistics and Port Services. The learned counsel for the petitioners futher submits that as against the tax liability, the petitioners have also discharged a portion of the tax liability by borrowing the money from the market and will take steps to liquidate the balance by depositing the consolidated amount of Rs.25,00,000/- per month in the ratio of Rs.20,00,000/- and Rs.5,00,000/- each.
The learned counsel for the petitioners have placed reliance on the decision of the Hon'ble Supreme court in Radha Krishnan petitioners submits that the Hon'ble Supreme Court upheld the view of the Gujarat High Court in the case of Valerius Industries Vs Union of India (2019) 30 GSTL 15: 2019 SCC Online Guj 6866. 5. On earlier occasion, the petitioners were asked to furnish any security that may be accepted by the respondent at the condition for staying the impugned proceedings. However, the respondents have declined to accept the same stating that the properties which were offered were already the subject matter of the charge with banks and further that the properties also did not belong to the petitioners but to the trust of which one of the Director of petitioners was a trustees.
Considering the fact that the petitioner is agreeing to pay consolidated
amount
of Rs.25,00,000/-
per
month
for discharging/liquidating the tax liability in the respective writ petitions, I am inclined the quash the impugned order and remit the case back to the respondent to pass a speaking order after considering the petitioner's representation. However, this order will come into force only after the petitioner's representation is disposed of by the respondent. The petitioners are therefore directed to give a fresh representation with its offer together with such additional security to protect the interest of the revenue to their satisfaction by 02.05.2006 so that a workable formula for liquidating tax liability of the respective petitioners can be achieved. This exercise shall be carried out by the respondent as expeditiously as possible preferably by 13.05.2022 so that the petitioner will be able to pay salaries to its workers/employees. 3/4 https://hcservices.ecourts.gov.in/hcservices/
W.P(MD).Nos.4779 and 4780 of 2022
These writ petitions stand disposed of with the above observations. No costs. Consequently, the connected miscellaneous petitions are closed. Assistant Registrar(AS) //// 28/04/2022 Sub Assistant Registrar(CS) sn To The Commissioner of CGST & Central Excise, O/o.The Commissioner of CGST & Central Excise, Central Revenue Buildings, GST Bhavan, No.4, Lal Bahadur Shastri Marg, Bibikulam, Madurai-625 002. + 2 CC to M/s.T. LAJAPATHI ROY, Advocate ( SR-21942 & 21943[F] dated 28/04/2022 ) +1 CC to M/s.S.RAGAVENTHRE, Advocate ( SR-22271[F] dated 28/04/2022 ) W.P(MD).Nos.4779 and 4780 of 2022 27.04.2022
svs(CO) TR(28.04.2022) 4P 5C 4/4 https://hcservices.ecourts.gov.in/hcservices/
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.