# M/s R.D. Enterprises v. Union of India & Ors

- **Citation:** (2024) 9 ILRA 604
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-09-12
- **Case number:** Writ Tax No. 978 of 2024
- **Bench:** Shekhar B. Saraf, Manjive Shukla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-r-d-enterprises-v-union-of-india-ors-52402
- **Pages:** 5

## Headnote

(A) Tax Law - Central Goods and Services
Tax Act, 2017 - Section 83 - Provisional
attachment to protect revenue in certain
cases - Power to 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 statute for a
valid exercise of the power must be
strictly fulfilled - Formation of an opinion
by the Commissioner under Section 83(1)
must be based on tangible material
bearing on the necessity of ordering a
provisional attachment for the purpose of
protecting the interest of the government
revenue.(Para -6)
Provisional attachment of bank account by
Department without fresh reasons - following
expiry of the prior attachment - Previous
attachment dated February 16, 2023, expired
after
one
year
-
Petitioner
successfully
challenged it - leading to its removal by order
dated May 6, 2024 - new attachment was
imposed on May 16, 2024, without any new
reasons. (Paras - 2, 3, 4)

HELD: - Provisional attachment order dated May
16, 2024 quashed and set aside. Reattachment
without fresh reasons violates Section 83 of the Act
and is arbitrary. Concerned bank directed to remove
the attachment and allow petitioner access to the
account. (Para - 9,10)

Petition allowed. (E-7)
List of Cases cited:

## Text

604 INDIAN LAW REPORTS ALLAHABAD SERIES
impugned orders are not sustainable in law,
thus, the impugned orders dated 21.4.1997
and 31.12.1991, passed by respondent
Nos.2 and 3 are hereby set aside. The writ
petition succeeds and is allowed.

26. However, the matter is remanded
back to the Additional Commissioner to
decide the issue afresh in accordance with
law.
----------
(2024) 9 ILRA 604
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.09.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.
THE HON'BLE MANJIVE SHUKLA, J.

Writ Tax No. 978 of 2024

M/s R.D. Enterprises ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Srijan Pandey, Sri Swetashwa Agarwal

Counsel for the Respondents:
A.S.G.I., Sri Krishna Agarawal, Sri Parv
Agarwal

(A) Tax Law - Central Goods and Services
Tax Act, 2017 - Section 83 - Provisional
attachment to protect revenue in certain
cases - Power to 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 statute for a
valid exercise of the power must be
strictly fulfilled - Formation of an opinion
by the Commissioner under Section 83(1)
must be based on tangible material
bearing on the necessity of ordering a
provisional attachment for the purpose of
protecting the interest of the government
revenue.(Para -6)
Provisional attachment of bank account by
Department without fresh reasons - following
expiry of the prior attachment - Previous
attachment dated February 16, 2023, expired
after
one
year
-
Petitioner
successfully
challenged it - leading to its removal by order
dated May 6, 2024 - new attachment was
imposed on May 16, 2024, without any new
reasons. (Paras - 2, 3, 4)

HELD: - Provisional attachment order dated May
16, 2024 quashed and set aside. Reattachment
without fresh reasons violates Section 83 of the Act
and is arbitrary. Concerned bank directed to remove
the attachment and allow petitioner access to the
account. (Para - 9,10)

Petition allowed. (E-7)
List of Cases cited:
1. Radha Krishan Industries Vs St. of H.P. &
ors., (2021) 6 SCC 771
2. Amazonite Steels Pvt. Ltd. Vs U.O.I., 2020
(36) G.S.T.L. 184 (Cal.)

(Delivered by Hon'ble Shekhar B. Saraf, J.
&
Hon'ble Manjive Shukla, J.)

1. Heard Sri Swetashwa Agarwal,
learned counsel appearing on behalf of the
petitioner and Sri Parv Agarwal, learned
counsel
appearing
on
behalf
of
the
respondents.

2. This is a writ petition under Article
226 of the Constitution of India wherein the
writ petitioner is aggrieved by the provisional
attachment order dated May 16, 2024 passed
by the respondent authorities under Section
83 of the Central Goods and Service Tax Act,
2017 (hereinafter referred to as "the Act").

3. It is to be noted that the same bank
account had been attached vide order dated
February 16, 2023. After expiry of the
9 All. M/s R.D. Enterprises Vs. Union of India & Ors.
605
period of one year, the writ petitioner had
filed a writ petition seeking removal of the
said attachment. Subsequent to the filing of
the said writ petition, it appears that the
attachment was removed and the same has
been recorded in the order passed by the
coordinate Bench of this Court dated May
6, 2024 in Writ Tax No.699 of 2024.

4. Surprisingly, ten days after passing
the order by the coordinate Bench of this
Court, a verbatim notice has been issued on
May 16, 2024 without providing for any
fresh reason for provisional attachment of
the account for the second time. This notice
even does not mention the fact that this
attachment is being done for the second
time. Furthermore, no specific reasons have
been provided for requirement of the
Department
for
fresh
provisional
attachment of the bank account.

5. In our view, this kind of arbitrary
action without providing any fresh reasons
to the petitioner for provisional attachment
is draconian in nature and cannot be
sustained in the eyes of law. Section 83 of
the Act is provided below :-

"Section
83.
Provisional
attachment to protect revenue in certain
cases

(1) Where during the pendency of
any proceedings under section 62 or
section 63 or section 64 or section 67 or
section 73 or section 74, the Commissioner
is of the opinion that for the purpose of
protecting the interest of the Government
revenue, it is necessary so to do, he may, by
order in writing attach provisionally any
property,
including
bank
account,
belonging to the taxable person in such
manner as may be prescribed.

(2)
Every
such
provisional
attachment shall cease to have effect after the
expiry of a period of one year from the date
of the order made under sub-section (1)."

6. In Radha Krishan Industries vs.
State of Himanchal Pradesh and Others
reported in (2021) 6 SCC 771 the Supreme
Court has held in relation to Section 83 of the
Act that a second attachment of the bank
account may be made under Section 83 of the
Act, but the Department has to provide fresh
reasons for the same. Relevant paragraphs
thereof are extracted below :-

"75.
Moreover,
an
order
of
provisional attachment was issued by the
Joint Commissioner which was withdrawn on
30-1-2019,
after
considering
the
representations made by the petitioner. On
the very ground, without any material change
in
circumstances,
another
order
of
provisional attachment came to be issued by
another Joint Commissioner. Therefore, it
was the contention of the petitioner before the
High Court that the subsequent order of
provisional attachment is in substance and
effect an order reviewing the earlier order
withdrawing
the
order
of
provisional
attachment which was not permissible and
therefore the subsequent order of provisional
attachment is without jurisdiction. The High
Court has not considered this aspect. Both
the earlier and the subsequent orders of
provisional attachment are on the same
grounds. Therefore, unless there was a
change in the circumstances, it was not open
for the Joint Commissioner to pass another
order of provisional attachment, after the
earlier order of provisional attachment was
withdrawn
after
considering
the
representations made by the petitioner. This
is an additional ground to set aside the
subsequent order of provisional attachment.

E. Summary of findings

76. For the above reasons, we
hold and conclude that:
606 INDIAN LAW REPORTS ALLAHABAD SERIES

76.1.The
Joint
Commissioner
while ordering a provisional attachment
under Section 83 was acting as a delegate
of the Commissioner in pursuance of the
delegation effected under Section 5(3) and
an appeal against the order of provisional
attachment was not available under Section
107(1).

76.2.The writ petition before the
High Court under Article 226 of the
Constitution challenging the order of
provisional attachment was maintainable.

76.3.The High Court has erred in
dismissing the writ petition on the ground
that it was not maintainable.

76.4.The power
to 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
statute for a valid exercise of the power
must be strictly fulfilled.

76.5.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.

76.6.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.

76.7.The formation of an opinion
by the Commissioner under Section 83(1)
must be based on tangible material bearing
on the necessity of ordering a provisional
attachment for the purpose of protecting
the interest of the government revenue.

76.8.In the facts of the present
case, there was a clear non-application of
mind by the Joint Commissioner to the
provisions of Section 83, rendering the
provisional attachment illegal.

76.9.Under the provisions of Rule
159(5), the person whose property is
attached is entitled to dual procedural
safeguards:

(a) An entitlement to submit
objections on the ground that the property
was or is not liable to attachment; and

(b) An opportunity of being
heard.

There has been a breach of the
mandatory requirement of Rule 159(5) and
the
Commissioner
was
clearly
misconceived in law in coming into
conclusion that he had a discretion on
whether or not to grant an opportunity of
being heard.

76.10.The Commissioner is dutybound to deal with the objections to the
attachment by passing a reasoned order
which must be communicated to the taxable
person whose property is attached.

76.11. A final order having been
passed
under
Section
74(9),
the
proceedings under Section 74 are no
longer pending as a result of which the
provisional attachment must come to an
end.

76.12.The appellant having filed
an appeal against the order under Section
74(9), the provisions of sub-sections (6)
and (7) of Section 107 will come into
operation in regard to the payment of the
tax and stay on the recovery of the balance
as stipulated in those provisions, pending
the disposal of the appeal.

77.For the above reasons, we
allow the appeal and set aside the
impugned judgment and order of the High
9 All. M/s R.D. Enterprises Vs. Union of India & Ors.
607
Court dated 1-1-2021 [Radha Krishan
Industries v.
State of H.P., 2021 SCC OnLine HP 4566]
."
(Emphasis added)

6. Upon perusal of Sub-section 2 of
Section 83 of the Act, it appears that such
provisional attachment shall cease to have
effect after the expiry of a period of one
year. The department cannot be allowed
simpliciter to issue a second notice, and
thereafter, third and fourth and continue
with the provisional attachment for four to
five years without giving any fresh reason
for the said provisional attachment. If the
same was allowed, Sub-section 2 of Section
83 of the Act would become otiose and
have no relevance whatsoever.

7. One may look into the judgment
passed by the Calcutta High Court in the
case of Amazonite Steels Pvt. Ltd. vs.
Union of India reported in 2020 (36)
G.S.T.L. 184 (Cal.), wherein the Court has
held as follows:-

"Epilogue:

"A tax collector should collect
taxes from a taxpayer just like a bee
collects honey from a flower in an expert
manner without disturbing its petals" -
Kautilya in Arthashastra.

38. The new regime under the
GST Act, 2017 is a new legislative creation
by which the Union Government along with
all the State Governments have streamlined
various statutes under which tax was
earlier collected to enhance the ease of
doing business by preventing multi-point
taxation that was extremely cumbersome
and time consuming for the citizens of
India. The raison d'etre of the GST Act,
2017 is to reduce the burden of tax and
also to simplify the procedures. This,
however, is coupled with certain far
reaching and drastic measures that would
be applicable on persons who evade the
payment of such taxes. One need not stress
the importance of the responsibility that
comes upon the Government officials who
take such drastic measures upon the
citizens of this country. Nonetheless, these
drastic provisions come with a purpose,
and that is to ensure collection of taxes so
that the inequities in society may be
reduced by the Government. Provisions
such
as
provisional
attachment
are
necessary to ensure that persons who
intend to evade taxes and/or are a part of a
mechanism to defraud the Government are
nipped in the bud and appropriate taxes
can be collected from such persons."

8. We are of the view that the
legislature never intended this provision to
be read in a casual manner, as the provision
for provisional attachment is a drastic
measure that the Department takes even
before assessing the liability of the
petitioner. This provision is in the nature of
preventive detention in criminal cases
where one detains a person without any
offence having been committed.

9. In light of the above, it becomes
extremely necessary for the Department to
justify the reasons for such a provisional
attachment and without such justification
being provided by the Department, by way
of specific reasons, such provisional
attachment would be illegal, arbitrary and
non est in law. In the present facts and
circumstances of the case, we do not find
recording of any such reasons.

10. Accordingly, the provisional
attachment order dated May 16, 2024 is
quashed and set aside. The bank concerned
is directed to remove the attachment and
608 INDIAN LAW REPORTS ALLAHABAD SERIES
immediately allow the petitioner to have
access to the said bank account. Needless
to mention, the Department shall be at
liberty to proceed in accordance with law.

11. The writ petition is allowed.
----------
(2024) 9 ILRA 608
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.09.2024

BEFORE

THE HON'BLE J.J. MUNIR, J.

Second Appeal No. 379 of 2010

U.P. Avas Evam Vikas Parishad, Lucknow
& Ors. ...Appellants
Versus
Virendra Kumar & Ors. ...Respondents

Counsel for the Appellant:
Madan Mohan, Chandra Shekhar Singh,
M.D.
Singh
Shekhar,
Madan
Mohan
Chaurasisa,
Rajan
Upadhyay,
Senior
Advocate

Counsel for the Respondent:
A.K. Mishra, Ajay Kumar Singh, Ashish
Kumar Singh, Gautam, O.V. Bajpai, Pushkar
Mehrotra, Swetashwa Agarwal, Varchaswa
Bajpai, Senior Advocate

Civil Law - Civil Procedure Code, 1908 -
Section - 100 - Order VII - Rule 11 - U.P.
Avas Evam Vikas Parishad Adhiniyam,
1965 - Sections 17, 32, 73, 82, 83, 84, 88
& 88(2) - - U.P. Town Improvement Act,
1919 - Section 36 - Specific Relief
Act,1963 - Sections 38 & 41 - Land
Acquisition Act, 1894- Section 17 - Second
Appeal - filed by defendants - original suit - for
a permanent prohibitory injunction - filed by
plaintiffs, against the defendant-appellants, who
claim ownership and tenancy of a disputed
property - The trial court dismissed the suit -
but, the appeal filed by plaintiffs was allowed,
leading to a decree in their favour - The
defendants then appealed in instant Second
Appeal - raised substantial questions of law
regarding the ownership and identity of the
disputed land - court finds that, in the entire
gamut of the otherwise very detailed findings
recorded by the lower appellant court to answer
for the plaintiffs, the ignorance of this principle
in dispute about location of the suit property
being in one plot number or numbers or the
other, would vitiate the conclusions - held, the
findings of the lower appellate court cannot be
U.P.held unless a survey of the contiguous
Khasra numbers is duly carried out according to
the fixed point method - hence, the impugned
decree passed by lower appellate court is set
aside - matter is remanded back to the court for
further investigation to accurately determine the
location of the suit property using a survey
commission or the total station method - lower
appellate court will then rehear and decide the
appeal afresh - directions issued, accordingly -
Appeal is allowed in part.(Para - 43, 45, 46, 47)

Second Appeal Partly allowed. (E-11)

List of Cases cited:

1. Shreepat Vs Rajendra Prasad & ors., 2000 (40)
ALR 534: JT 2000 (7) SC 379,

2. Delhi Development Authority Vs Mohd. Sher Nabi
Chaman & ors., 2015 SCC OnLine Del 7832.

(Delivered by Hon'ble J.J. Munir, J.)

1. This is a defendants' second appeal
arising out of a suit for permanent
prohibitory injunction.

2. Original Suit No.1187 of 1991 was
instituted by the four plaintiffs, Virendra
Kumar,
Sheo
Singh,
Rampal
Singh
Chauhan and Km. Pushpa with a case that
plaintiff-respondents Nos.1 to 3 are tenants
in the premises detailed at the foot of the
plaint since the year 1970 on a monthly
rent of Rs.300/-. Defendant-respondent
No.5, Sirajuddin son of Fariduddin, arrayed
as defendant No.3 to the suit, was the
owner of the said premises and the land