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2017 DIGILAW 818 (GUJ)

Hygenic Palm Oil Pvt. Ltd. v. State of Gujarat

2017-04-17

B.N.KARIA, M.R.SHAH

body2017
JUDGMENT : M.R. Shah, J. 1. Rule. Learned AGP Shri Pranav Trivedi appears and waives service of notice of rule on behalf of the respondent-State. 2. In the facts and circumstances of the case, with the consent of the respective parties, this petition is taken up for final hearing today. 3. By way of this petition under Article 226 of the Constitution, the petitioner has challenged the impugned order dated 9th January 2017 passed by the respondent attaching the bank account of the petitioner in exercise of powers under Section 45 of the Gujarat Value Added Tax Act, 2003 ["VAT Act" for short]. 4. It is mainly contended on behalf of the petitioner that the impugned order dated 9th January 2017 is issued in breach of principles of natural justice. It is the case on behalf of the petitioner that the show cause notice was issued upon the petitioner calling upon the petitioner to show cause as to why the bank account of the petitioner may not be attached on 9th January 2017 and without even waiting for the reply from the petitioner, the impugned order has been passed on the very day i.e., 9th January 2017 attaching the bank account of the petitioner. It is also the case on behalf of the petitioner that even otherwise, the impugned order passed by the respondent No. 2 attaching the bank account of the petitioner is a non-speaking order and non-reasoned order as it does not reflect any satisfaction on the part of the authority to invoke the powers under Section 45 of the VAT Act. It is submitted that unless and until there is a satisfaction recorded on the part of the authority that with a view to protect the interest of the Revenue and as the dealer is likely to dispose of the properties/withdraw the amount from the bank; as the case may be, with a view to avoid the liability to pay tax under the Act, the authority cannot pass an appropriate order under Section 45 of the Act. It is submitted that in the impugned order, no such satisfaction is recorded. In support of his submissions, Shri S.P Majmudar, learned advocate appearing on behalf of the petitioner has relied upon a decision of Division Bench of this Court in the case of Vishwanath Realtors & Anr. v. State of Gujarat & Ors. It is submitted that in the impugned order, no such satisfaction is recorded. In support of his submissions, Shri S.P Majmudar, learned advocate appearing on behalf of the petitioner has relied upon a decision of Division Bench of this Court in the case of Vishwanath Realtors & Anr. v. State of Gujarat & Ors. [Special Civil Application No. 7210 of 2015]. 5. Shri Pranav Trivedi, learned AGP has tried to support the impugned order. It is submitted that even the conduct on the part of the petitioner on and from 4th January 2017 i.e., from the date of search is also required to be considered. It is submitted that on 4th January 2017 i.e., on and from the date of search, the petitioner started withdrawing substantial amounts from the bank account, only with a view to defeat the tax liability to be discharged. It is further submitted that a substantial amount of Rs. 60 lakhs came to be withdrawn by the petitioner after 4th January 2017. It is submitted that therefore, immediate steps were required to be taken so that further damage is not caused to the Revenue, the impugned order came to be passed on 9th January 2017. It is submitted that therefore, the conduct on the part of the Dealer withdrawing substantial amount of more than Rs. 60 lakhs from the bank account itself is suggestive of the intention on the part of the Dealer to defeat the claim of the Revenue. It is further submitted that even a substantial amount has been withdrawn/permitted to be withdrawn by the concerned Bank after the impugned order on 10th January 2017. It is submitted that therefore to protect the interest of the Revenue, the impugned order has been passed in exercise of powers under Section 45 of the VAT Act, and therefore, the same may not be interfered with in exercise of powers under Article 226 of the Constitution of India. 6. Heard learned advocates appearing on behalf of the respective parties at length. 7. At the outset, it is required to be noted and it is not in dispute that the show cause notice came to be issued upon the petitioner on 9th January 2017 and the impugned order under Section 45 of the Act has been passed on the very day i.e., 9th January 2017. 7. At the outset, it is required to be noted and it is not in dispute that the show cause notice came to be issued upon the petitioner on 9th January 2017 and the impugned order under Section 45 of the Act has been passed on the very day i.e., 9th January 2017. In a given case, it may so happen that having satisfied that the immediate steps are required to be taken or that the Dealer is likely to dispose of the properties and/or withdraws amount from the bank with a view to defeat the claim of the Revenue, in that case, the authority may pass an order of provisional attachment. However, that does not mean that thereafter, while passing the final order under Section 45 of the Act, the petitioner-Dealer is not required to be given any opportunity of being heard. Under the circumstances, the impugned order can be said to be against the principles of natural justice. Even otherwise, from the impugned order, it appears that the same is a non-speaking and non-reasoned order. Nothing is reflected in the order as to why such an action of attachment of bank account in exercise of powers under Section 45 of the Act is warranted. Whatever is submitted before this Court is not reflected from the impugned order. 8. In view of the above facts, more particularly the fact that the show cause notice has been issued on 9th January 2017 and on the very day i.e., 9th January 2017, the impugned order has been passed and thereafter, no further opportunity is provided to the petitioner, even assuming that the impugned order can be said to be a provisional attachment, which was required to be passed considering the facts and circumstances of the case; more particularly the Department having found that the Dealer has withdrawn substantial amount of Rs. 60 Lakhs and more after the date of raid/search, in that case also, the petitioner-Dealer was required to be given an opportunity to show cause why order of attachment should not be passed under Section 45 of the Act and also on the ground that the impugned order is not a speaking order/reasoned order, the impugned order is hereby quashed and set-aside. However, in the peculiar facts and circumstances of the case narrated hereinabove and looking to the allegations that after the date of the raid/search i.e., 4th January 2017, the dealer has withdrawn substantial amount i.e., more than Rs. 60 Lakhs and to protect the interest of the Revenue, it is directed that the impugned order be treated as a provisional attachment order and the petitioner shall be afforded a reasonable opportunity of being heard before passing the final order of attachment under Section 45 of the Act. Meaning thereby, the order of attachment of the bank account shall remain in force by treating it as a provisional attachment order, till appropriate order is passed by the appropriate authority after giving opportunity of being heard to the petitioner and/or his representative. 9. Shri S.P. Majmudar, learned advocate for the petitioner has stated at the bar that the applicant shall appear before the appropriate authority on 24th April 2017 between 11:00 am and 2:00 pm and make submissions with respect to the proposed order of attachment of the bank account in exercise of power under Section 45 of the Act. That thereafter, the appropriate authority is directed to pass appropriate order in accordance with law and on merits and pass a speaking reasoned order. The aforesaid exercise shall be completed by 27th April 2017 and whatever the order is passed, the same shall be communicated to the petitioner forthwith. However, it is made clear that we have not expressed anything on the merits in favour of either parties as to whether in the facts and circumstances of the case, the order of attachment of the bank account is warranted or not. It is ultimately for the appropriate authority to pass appropriate order in accordance with law and on merits; more particularly, considering Section 45 of the Act. Rule is made absolute to the aforestated extent. 10. In the facts and circumstances of the case, there shall be no order as to costs.