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Gujarat High Court · body

2016 DIGILAW 1018 (GUJ)

Samay Enterprise v. State of Gujarat

2016-05-06

G.R.UDHWANI, HARSHA DEVANI

body2016
ORDER : Harsha Devani, J. 1. Leave to amend the prayer clause. 2. By this petition, the petitioner seeks release from attachment of the properties, movable and immovable, as provided in Annexure-X to the petition and also release the impounded items as provided in Annexure-X to the petition and seeks release from attachment the stock of goods and also the bank accounts which have been attached by virtue of provisional assessment orders made under section 45 of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the Act") 3. Heard Mr. Abhishek Mehta, learned advocate, for the petitioners and Ms. Maithili Mehta, learned Assistant Government Pleader, for the respondents. 4. From the orders made under section 45 of the Act which are subject matter of the present petition, it appears that the approximate tax liability of the petitioners as estimated by the respondents is tax of Rs. 2,59,920/- and penalty of Rs. 5,07,61,026/- under provisional attachment order dated 22.2.2016 and tax of Rs. 12,73,586/- and penalty of Rs. 5,22,82,724/- under the provisional attachment order dated 19.4.2016. While it is also stated in the order of provisional attachment that the petitioners along with others would be jointly and severally liable for an amount of Rs. 398.88 crore, insofar as the liability computed upon preliminary investigation is concerned, it is to the extent stated hereinabove. Against the said amount, the respondents have attached various properties listed at Annexure-X to the petition which comprises of several movable and immovable properties of the petitioner. The respondents have also impounded various items and have also seized the stock of the petitioners and called upon the petitioners to maintain a stock worth Rs. 2,05,88,492/- as well as the stock worth Rs. 35,43,668/- by separate orders dated 19.4.2016 made under section 45 of the GVAT Act. 5. Mr. Abhishek Mehta, learned advocate for the petitioners submitted that the seized stock consists of goods which are perishable in nature and that part of the goods have already perished. It was submitted that considering the nature of the proceedings against the petitioner, there is hardly any likelihood of receiving fresh stock from M/s. Dharampal Satyapal Ltd. Under the circumstances, if the petitioners are required to maintain the existing stock, the same is likely to perish. It was submitted that considering the nature of the proceedings against the petitioner, there is hardly any likelihood of receiving fresh stock from M/s. Dharampal Satyapal Ltd. Under the circumstances, if the petitioners are required to maintain the existing stock, the same is likely to perish. It was, accordingly, urged that the perishable stock, therefore, directed to be released and the attachment made on the bank account of the petitioners may also be lifted. It was urged that the hard-disk of desktop computers etc. and all other documents from the office of the petitioners having been impounded by the respondents, it is not possible for the petitioners to carry out the day-to-day business activities and the business of the petitioners has come to a standstill. It was, accordingly, urged that at least copies of the relevant material be furnished to the petitioners so that they can carry out their day-to-day business activities. 6. Ms. Maithili Mehta, learned Assistant Government Pleader, vehemently opposed the request for grant of any interim relief to the petitioners. Pointing out the nature of the alleged illegalities committed by various parties, including the petitioners, whereby huge refunds of input tax credit are alleged to have been availed by connected parties in connivance with the petitioners No. 2 and 3, it was submitted that the petitioners are involved in a huge scam where at present the joint and several liability of all concerned has been estimated at Rs. 398.88 crore and that the figure in all probabilities is likely to increase. It was submitted that at this stage investigation is being carried out by the respondents under the provisions of the GVAT Act and the police authorities in the criminal proceedings instituted in connection with the scam, under the circumstances, with a view to secure the interests of the revenue, the orders of provisional attachment have been passed. It was urged that having regard to the amplitude of the scam, the petitioners are not entitled to the grant of any interim relief. 7. Insofar as the impounded hard-disk and other materials are concerned, the learned Assistant Government Pleader submitted that copies thereof would be furnished to the petitioners. 8. Having regard to the submissions advanced by the learned counsel for the respective parties, issue notice returnable on 8.6.2016. 9. 7. Insofar as the impounded hard-disk and other materials are concerned, the learned Assistant Government Pleader submitted that copies thereof would be furnished to the petitioners. 8. Having regard to the submissions advanced by the learned counsel for the respective parties, issue notice returnable on 8.6.2016. 9. In the backdrop of the facts noted hereinabove, in the opinion of this court, since it appears that on preliminary investigation made in the case of the petitioners by the respondents, the estimated tax liability of the petitioners is tax of Rs. 2,59,920/- and penalty of Rs. 5,07,61,026/- under the provisional attachment order dated 22.2.2016 and tax of Rs. 12,73,586/- and penalty of Rs. 5,22,82,724/- under the provisional attachment order dated 19.4.2016. While a larger figure of Rs. 398.88 crores is also stated, such liability is stated to be the joint and several liability of all concerned in the alleged scam. No basis is stated for arriving at such figure in the said orders. Investigation and inquiry is still underway, and at this stage there is no assessed liability. The court is, therefore, of the view that considering the total estimated liability qua the petitioners upon preliminary investigation in their case, attachment of the movable and immovable properties of the petitioners is sufficient to secure such amount. Therefore, at this stage, the court is inclined to grant ad-interim relief to the petitioners to the following extent: The respondents are hereby directed to lift the provisional attachment made on the bank accounts of the petitioners as well as to delete the condition for maintaining stock to the extent referred to in the orders dated 19.04.2016 and to permit the petitioners to dispose of the perishable goods. The respondents shall also provide the copies of the impounded items which are mentioned in Annexure-X to the petition as expeditiously as possible. Direct service is permitted.