Kerala High Court
Kerala Communicators Cable ... vs The Commissioner Of Central Tax ... on 1 October, 2021
WP(C) No.20945/2021 1/7
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
Friday, the 1st day of October 2021 / 9th Aswina, 1943
WP(C) NO. 20945 OF 2021
PETITIONER:
KERALA COMMUNICATORS CABLE LIMITED 142-HA, FIRST FLOOR, COA BHAVAN,
THOUNDAYIL ROAD, PANAMPILLY NAGAR, ERNAKULAM-682 036, (REPRESENTED
BY ITS MANAGING DIRECTOR, MR. SURESH KUMAR.P.P)
RESPONDENT:
1. THE COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, OFFICE OF THE
COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, KOCHI
COMMISSIONERATE, CENTRAL REVENUE BUILDING, IS PRESS ROAD,
KACHIERIPADI, KOCHI-682 018
2. THE ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GOODS AND
SERVICE TAX INTELLIGENCE, KOCHI ZONAL UNIT, 1ST FLOOR, CENTRAL
EXCISE BHAVAN, KATHRIKADAVU, KOCHI-682 017
3. UNION OF INDIA, (REPRESENTED BY SECRETARY, FINANCE DEPARTMENT,
DELHI), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF
INDIA, NORTH BLOCK, NEW DELHI-110 001
Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to stay the operation of Ext P9,P9A and Ext. P9B attachment
orders issued by the 1 st respondent under Sec 83 of CGST Act 2017 and
permit the petitioner to operate its bank accounts.
This petition coming on for admission upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
M.P.SHAMEEM AHAMED, CYRIAC TOM Advocates for the petitioners ,SRI. SREELAL
N. WARRIAR,Advocate for R1 and R2 and of ASSISTANT SOLICITOR GENERAL OF
INDIA for R3,the court passed the following:
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BECHU KURIAN THOMAS, J.
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W.P.(C)No. 20945 of 2021
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Dated this the 1st day of October, 2021
ORDER
Admit.
2. Adv. Sreelal N. Warriar takes notice on behalf of
respondents 1 and 2. The learned Assistant Solicitor General of
India takes notice on behalf of third respondent.
3. In this writ petition, the petitioner is challenging
Exts.P9, P9(a) and P9(b) orders of the provisional attachments of
property under Section 86 of the Central Goods and Service Tax
Act, 2017. As per the impugned orders, as many as seven
accounts of the petitioner have been provisionally attached in
purported exercise of powers under Section 83 of CGST Act.
4. This Court's attention is drawn to Ext. P5 order of the
learned Single Judge of this Court in W.P.(C)No.5063 of 2021,
wherein in a similar situation earlier, the second respondent had
invoked the powers under Section 83 of the CGST Act and ordered
provisional attachment of the bank accounts of the petitioner.
Subsequently, the said order was modified, permitting the
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W.P.(C)No. 20945 of 2021
petitioner to furnish a bank guarantee of Rs. 30 Crores in lieu of
releasing the provisional attachment over the bank accounts.
When the petitioner challenged the said order directing furnishing
of bank guarantee, this Court, by Ext.P5 order, stayed the
condition of furnishing a bank guarantee however, directed the
petitioner to furnish by way of an affidavit an undertaking that it
shall not alienate any of its fixed assets, plant, property and
equipment shown in the balance sheet dated 31.03.2020.
5. The first respondent in that writ petition challenged
the order of the learned Single Judge before the Division Bench in
WA.No.745 of 2021. After hearing the parties therein the
Division Bench refused to interfere by its order dated 04.08.2021.
6. Within eight weeks thereafter, Ext. P9 series is seen to
be issued, once again invoking the powers under section 83 of
the CGST Act and ordering the provisional attachments of 7
accounts through Ext.P9, Ext.P9(A), and Ext.P9(B).
7. In the decision in Radha Krishan Industries v.
State of Himachal Pradesh and Ors. [AIR 2021 SC 2114],
the Hon'ble Supreem Court had occasion to consider the exercise
of powers under Section 83 of the CGST Act and after elaborate
consideration, laid down the manner and mode in which the
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W.P.(C)No. 20945 of 2021
powers are to be exercised. Condition No.4, 5, 6 and 7 are
relevant and the same is extracted as below:
(iv) The power of order a provisional attachment of
the property of the taxable person including a bank
account is draconian in nature and the conditions
which are prescribed by the status for a valid
exercise of the power must be strictly fulfilled;
(v) The exercise of the power for ordering a
provisional attachment must be preceded by the
formation of an opinion by the Commissioner that it
is necessary so to do for the purpose of protecting
the interest of the government revenue. Before
ordering a provisional attachment the Commissioner
must form an opinion on the basis of tangible
material that the Assessee is likely to defeat the
demand, if any, and that therefore, it is necessary so
to do for the purpose of protecting the interest of the
government revenue.
(vi) The expression "necessary so to do for
protecting the government revenue" implicates that
the interests of the government revenue cannot be
protected without ordering a provisional attachment;
(vii) The formation of an opinion by the
Commissioner under Section 83(1) must be based on
tangible material bearing on the necessity of ordering
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W.P.(C)No. 20945 of 2021
a provisional attachment for the purpose of protecting
the interest of the government revenue;
8. On a reading of Exts. P9, P9(A) and P9(B) orders, I am
prima facie satisfied that none of the stipulations specfified in
para 72 of the aforesaid judgment are evident in the orders
impugned in this writ petition. I am prima facie satisfied that
there is non-application of mind to the purport of power
exercisable by the second respondent under Section 83 of the
CGST Act.
9. In this context, I also bear in mind that the crippling
effect an order of provisional attachment, on the bank accounts
of a running establishment can have. Petitioner asserts that it is a
running establishment and the annual audited reports, a copy of
which is produced as Ext.P8 shows that the petitioner is a
running establishment
In view of all the circumstances, mentioned above both
legal and factual, I am prima facie satisfied that the order
impugned are liable to be stayed. Accordingly there will be a stay
of operation of Exts.P9, P9(A) and P9(B) attachment order for a
period of 8 weeks.
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W.P.(C)No. 20945 of 2021
Needless to mention in view of this stay that there is no
prohibition in the petitioner operating the respective bank
accounts during the continuance of this order.
Handover.
Sd/-
BECHU KURIAN THOMAS
JUDGE
AJ/01.10.2021
01-10-2021 /True Copy/ Assistant Registrar
WP(C) No.20945/2021 7/7
WP(C) 20945/2021
Exhibit P5 COPY OF THE INTERIM ORDER DATED 24.03.2021 IN WP
15842/2021
Exhibit P8 COPY OF THE AUDITED FINANCIAL STATEMENT OF THE
PETITIONER FOR THE YEAR ENDING MARCH 2021
Exhibit P9 COPY OF THE FORM DRC 22 (DIN 20210958T10000333A4C)
DATED 30.09.2021 ISSUED TO BE MANAGER , FEDERAL BANK,
PANAMBILLY NAGAR, ERNAKULAM
Exhibit P9A COPY OF THE FORM DRC 22 (DIN 20210958T000000D9FC) DATED
30.09.2021 ISSUED TO BE MANAGER, STATE BANK OF INDIA,
PUDUKKAD BRANCH
Exhibit P9B COPY OF THE FORM DRC 22 (DIN 20210958T1000094932) DATED
30.09.2021 ISSUED TO BE MANAGER, FEDERAL BANK,
PANAMBILLY NAGAR, ERNAKULAM
