Sunbright Designers PVT. LTD. vs. State Of Maharashtra And Ors
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The Petitioner, Sunbright Designers Pvt. Ltd., filed a writ petition challenging an order dated April 21, 2022, passed by the Respondent-Authority, attaching its bank account under Section 83 of the Maharashtra Goods and Services Act, 2017 (MGST Act). The Petitioner contended that the attachment was not liable and, crucially, that the Respondent-Authority lacked jurisdiction as the Petitioner was registered under the Tamil Nadu GST Act, 2017. The Respondents relied on a previous High Court decision in M/s. Jaychem Enterprises Pvt. Ltd. Vs. Additional Director General, Nagpur Zonal Unit and Ors., arguing that the Petitioner had an alternative remedy under Rule 159(5) of the Maharashtra GST Rules.
Held
The Court held that the Petitioner must first exhaust the remedy available under Rule 159(5) of the Maharashtra GST Rules, 2017. The Court reasoned that the decision in M/s. Jaychem Enterprises Pvt. Ltd. Vs. Additional Director General, Nagpur Zonal Unit and Ors. is applicable, and the remedy under Rule 159(5) is not ineffective. It stated that the authority is not rendered powerless by the mere raising of a jurisdictional issue and that such issues can be examined within the framework of the provided remedy. The Court noted that the bank account had been attached since April 2022. Therefore, the Court directed that if the Petitioner approaches the authority under Rule 159(5) within one week, the concerned authority should endeavor to decide the matter as per law within three weeks of the application's filing. All contentions raised by the parties on merits were kept open.
Key Issues
1. Whether the Respondent-Authority, appointed under the MGST Act, 2017, has jurisdiction over a registered person falling under the Tamil Nadu GST Act, 2017, for actions taken under Section 83 of the MGST Act, 2017? 2. Whether the Petitioner is required to exhaust the alternative remedy provided under Rule 159(5) of the Maharashtra GST Rules, 2017, before invoking the writ jurisdiction of this Court, despite raising a jurisdictional issue? Petitioner's Arguments: The Petitioner argued that the Respondent-Authority lacked jurisdiction, rendering the attachment order invalid. They contended that the issue of jurisdiction is a fundamental one that the High Court should address directly through its writ powers. Respondents' Arguments: The Respondents argued that the Petitioner must first avail the remedy under Rule 159(5) of the Maharashtra GST Rules, which provides for the revocation of attachment. They relied on the High Court's decision in M/s. Jaychem Enterprises Pvt. Ltd. Vs. Additional Director General, Nagpur Zonal Unit and Ors., which held that this remedy is not ineffective and allows for factual examination and substantial relief.
Sections Cited
Section 83, Rule 159(5)
AI-generated summary — verify with the full judgment below
WP 7070-22
IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURI ICTION WRIT PETITION NO. 7070 OF 2022 Sunbright Designers Pvt. Ltd. ...Petitioner V/s. The State of Maharashtra & Ors. ...Respondents ---- Mr. Brijesh Pathak for Petitioner. Mrs. Shruti D. Vyas, ‘B’ Panel Counsel for the Respondent-State. ---- CORAM : NITIN JAMDAR AND ABHAY AHUJA, JJ. DATE : 7 JANUARY, 2023 P.C. The Petitioner is before us challenging the order passed by the Respondent in attaching the bank account no. 50200006372609 vide order bearing reference no. JC-INV-C/2022-23/DRC-22/B-44 Mumbai dated 21 April 2022 and for direction to allow the operation of the bank account against the action taken by the Respondents under Section 83 of the Maharashtra Goods and Services Act, 2017. 2. Apart from factual aspects raised by the Petitioner contending that the bank account of the Petitioner was not liable Nikita Gadgil 901. WP 7070-22 to be attached, Petitioner has also raised an issue of juri iction of the Respondent-Authority. According to the Petitioner, the Petitioner is a registered person under the CGST Act falling within the juri iction of Tamil Nadu GST Act, 2017 and the Respondent No.2 to 4 being officers appointed under MGST Act, 2017 will not have juri iction over the Petitioner. Learned Counsel for the Petitioner states that this being the issue of juri iction, the Petitioner is entitled to invoke writ juri iction of this Court. 3 Learned Counsel for the Respondents has relied upon the decision of this Court in the case of M/s. Jaychem Enterprises decision of the Gujarat High Court in case of M/s. Formative Tex 1 Writ Petition No. 2583 of 2021 dated 8 July, 2021 Nikita Gadgil 901. WP 7070-22 Fab Vs. State of Gujarat & Others.1 and the Punjab & Haryana Ltd. dealt with the contentions observing thus:- “ 5. On perusal of the decision in Bindal Smelting Pvt. Ltd.(supra), it appears that the Court considered the grievance raised before if only after recourse to Rule 159(5) of the said Rules had been taken by the petitioner and an order passed on the objection that was raised. The Court examined the order passed by the relevant authority and bearing in mind the facts as well as the legal position, proceeded to pass an appropriate order.
It is clear that sub-rule (5) of Rule 159 of the said Rules provides a remedy if any particular order of attachment under sub-rule (1) leaves a party, subject to tax, aggrieved. We are of the opinion that such a remedy, as made available by the said Rules, is not an ineffective remedy but on the contrary, if sufficient case is set up, substantial relief can be granted to the objector. It is for the petitioner to satisfy the Additional Director General that for the reasons urged, the property ought to be released from attachment by making an appropriate order in Form GST DRC-23. The position as to whether the impugned order, in fact, seeks to protect the interest of the revenue or is otherwise, including the balance in the current account as submitted by the petitioner, would require a factual examination and determination. Thus, it is all the more necessary that the petitioner exhausts the remedy provided by sub-rule (5) of Rule 159 of the said Rules. Should the Additional Director General refuse to release the property from attachment, a reasoned order is required to be passed and such order could be subjected 1 R/Special Civil Application No. 14059 of 2020 2 CWP No. 31382 of 2019 (O & M) Nikita Gadgil 901. WP 7070-22 to a challenge before the appropriate forum in accordance with law.
Since the petitioner has not taken to recourse to sub- rule (5) of Rule 159 of the said Rules, we decline interference at this stage. However, we grant the petitioner a week’s time to approach the Additional Director General under the said provision and if such an approach is made, a reasoned order shall be passed after extending an opportunity of hearing.
All contentions on the merits of the rival claims are kept open.”
There is, therefore, no reason why we should not take the similar view as taken in the Jaychem Enterprise Pvt. Ltd. and ask the Petitioner to approach the concerned authority under Rule 159 (5) of the GST Rules for revocation of the attachment. The contention of the Petitioner that the authority will not be able to decide whether it has juri iction is not correct and it is not the law that the moment an issue of juri iction is raised, the authority is rendered powerless. There is, therefore, no reason to take a different view than the one taken in Jaychem Enterprises Pvt. Ltd.
The grievance of the Petitioner that the bank account has remained attached for a long period of time, is to be noted but partially it is the Petitioner to blame for not taking recourse to Rule 159(5) of the Rules. Be that as it may, since the bank account is attached in April 2022, we direct if the Petitioner Nikita Gadgil 901. WP 7070-22 approaches the authority under Rule 159 (5) of the Rules within one week, the concerned authority will make an endeavour to take a decision thereupon as per law, within three weeks of filing of such application. All the contentions raised by the parties, are kept open.
Writ Petition is accordingly disposed of. (ABHAY AHUJA, J.)
(NITIN JAMDAR, J.) Nikita Gadgil NIKITA YOGESH GADGIL NIKITA YOGESH GADGIL Date: 2023.01.11 14:29:55 +0530
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.