Karani Petroleum vs. State Of Gujarat

Facts

The petitioner, Karani Petroleum, engaged in the petroleum dealership business, filed a Special Civil Application challenging orders dated 11.08.2021 and 01.10.2021 issued by respondent no. 3, directing the attachment of its bank accounts. Additionally, a direction dated 19.08.2019 to BPCL Petroleum Company to stop supplies to the petitioner was also challenged as arbitrary. The petitioner claimed that its lawyer and Chartered Accountant, in collusion, failed to pay Goods and Services Tax and misled VAT authorities. Two FIRs have been lodged: one on 07.08.2021 by a private complainant and another on 14.10.2021 by the Additional Commissioner of State Tax, naming the petitioner. The petitioner expressed readiness to pay the outstanding tax liability and had submitted a representation on 13.09.2021 requesting installments.

Held

The Court chose not to delve into the merits of the case due to the pendency of criminal complaints. It noted the petitioner's readiness to pay the outstanding tax liability and their representation seeking installments. The Court directed respondent no. 2 to consider the petitioner's representation, including the request for installments and the withdrawal of instructions to BPCL, within two weeks of receiving the order. This consideration was to be done in accordance with the law, irrespective of the disposal of the present petition. The Court stated that if the outcome of the representation is unfavorable to the petitioner, they would be at liberty to pursue legal recourse. The petition was disposed of with these directions.

Key Issues

1. Whether the orders dated 11.08.2021 and 01.10.2021, directing the attachment of the petitioner's bank accounts, and the direction dated 19.08.2019 to BPCL to stop supplies, are arbitrary and unsustainable under law, warranting a writ of mandamus to quash and set them aside? Petitioner's Contention: The petitioner argued that the impugned orders are arbitrary and cannot be sustained. They sought a writ of mandamus to quash the orders attaching their bank accounts and to withdraw the instruction to BPCL. They also requested the court to direct respondent no. 2 to sympathetically consider their representation for payment of tax liability in installments. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or State. However, the context of the FIRs suggests that the revenue is pursuing recovery of alleged tax dues.