M/S Formative Tex Fab vs. State Of Gujarat
Facts
The petitioner, M/s. Formative Tex Fab, filed a writ application challenging orders of provisional attachment of its properties and bank accounts. The total tax liability sought to be fastened on the petitioner was Rs. 1,67,74,868. The Assistant Commissioner of State Tax, Surat, issued two orders in Form GST DRC-22: one dated July 24, 2020, for provisional attachment of immovable properties under Section 83 of the Gujarat Goods and Services Tax Act, and another dated September 23, 2020, for provisional attachment of a cash credit account with Kotak Bank. The petitioner argued that the cash credit account could not be attached under Section 83 and that the bank, upon instruction to attach the cash credit account, erroneously froze all other accounts, including fixed deposits. This was the third round of litigation concerning the matter.
Held
The Court held that the provisional attachment of the cash credit account bearing No. 510044021166 maintained with Kotak Bank is not sustainable in law. The Court stated that the law in this regard is no longer res integra, implying it is a settled legal position. Consequently, the Court quashed and set aside the order of provisional attachment dated September 23, 2020, passed in Form GST DRC-22 concerning this account. The Court noted that the other reliefs prayed for in the writ application were not pressed by the petitioner. Therefore, the Court disposed of the writ application with the above observation.
Key Issues
1. Whether the provisional attachment of the cash credit account (Account No. 510044021166) maintained with Kotak Bank by the Assistant Commissioner of State Tax under Section 83 of the Gujarat Goods and Services Tax Act, 2017, is legally sustainable? The petitioner contended that a cash credit account cannot be provisionally attached under Section 83 of the Act. Furthermore, the petitioner argued that the bank, upon receiving instructions to attach the cash credit account, erroneously froze all other accounts, including fixed deposits, despite the attachment order being specific to the cash credit account. The respondent State argued that the attachment was made in accordance with the law to safeguard the revenue. However, the judgment does not explicitly record the State's specific arguments regarding the sustainability of attaching the cash credit account itself.
Sections Cited
Section 83, Section 74
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 By this writ application under Article 226 of the Constitution of India, the writ applicant, a partnership firm through one of its partners, has prayed for the following reliefs: “a) to declare the impugned order No.GSL/S.5(1)/S.83/B.14 dated 15.01.2018 issued by respondent No.2, as without authority of law and ultra vires the provisions of the Gujarat Goods and Services Tax Act. b) To quash and set aside the impugned Form DRC 22 dated 24.01.2020
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