# M/S R.J. Exim, Meerut & Anr v. The Prin. Comm. Central Good and Services Tax & Ors

- **Citation:** (2021) 1 ILRA 686
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-03-29
- **Case number:** Writ Tax No. 608 of 2020
- **Bench:** Surya Prakash Kesarwani, Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-r-j-exim-meerut-anr-v-the-prin-comm-central-good-and-services-tax-ors-46117
- **Pages:** 6

## Headnote

(A) Civil Law -Central Goods and Service
Tax Act, 2017: Section 70, 83, 74(5) -
CGST Rules, 2017: Rule 142(1A), 159(5) -
Section 74(5) of the Act affords an opportunity
to a person chargeable with tax, before service
of notice under sub-section (1), to pay the
amount of tax and interest under Section 50
and penalty of such tax on the basis of own
ascertainment of such tax or the tax ascertained
by the proper officer. The proper officer issued
an intimation letter dated 22.07.2020 providing
an opportunity to the petitioner to file an
objection, but the petitioners have failed to do
so. The impugned provisional attachment order
has been issued by the competent authority
under Section 83 of the Act, against which also
the petitioner had the opportunity to file an
objection under sub-Rule 5 or Rule 159 of the
Rules, but they failed to file any objection.
1 All. M/S R.J. Exim, Meerut & Anr. Vs. The Prin. Comm. Central Good & Services Tax & Ors. 687
Therefore, impugned orders cannot be said to suffer
from any manifest error of law. (para 10, 11)

Writ Petition Rejected. (E-8)

List of Cases cited :-

## Text

686 INDIAN LAW REPORTS ALLAHABAD SERIES

13. The amount in arrears as per order
in
original
dated
29.03.2019
is
Rs.1,74,66,374/-. The relief under Section
124 of the Act, 2019 "Sabka Vishwas
Scheme" has been computed on the
aforesaid amount in arrears. Accordingly,
the Tax relief under Section 124(1)(c) has
been
given
to
the
petitioner
for
Rs.69,86,549.60. The balance amount of
Rs. 1,04,79,824.40 determined by the
designated authority and payable by the
petitioner
under
Section
127,
is
in
accordance with the provisions of Section
124(1)(c) read with Section 121(c)/(d) and
(e) of the Act which does not suffer from
any error of law.

14. From the facts and the legal
provisions as aforenoted neither the circular
is in breach of the provisions of Section
124(1)(c) or sub-section (2) of Section 124
nor the amount estimated as per SVLDRS3 dated 01.02.2020 suffers from any error
of law

15. For all the reasons aforestated, we
do not find any merit in this writ petition.
Consequently, the Writ Petition fails and is
hereby dismissed.

16. After this judgment was dictated
in open Court, Sri Anurag Khanna, learned
Senior Advocate for the petitioner submits
that the SVLDRS-3 was issued on
01.02.2020 but the petitioner could not
deposit the amount due to COVID - 19
Pandemic and the pendency of the present
writ petition. He, therefore, submits that the
respondent no.2 may be directed to accept
the payment of the amount determined by
SVLDRS-3, within a time bound period.

17. Without issuing any direction in
this regard, we leave it open to the
petitioner to approach the respondent no.2
to make a request and the respondent no.2
shall be at liberty to consider the request in
accordance with law. It is made clear that
we have not issued any direction in this
regard.
----------
(2021)01ILR A686
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.11.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ Tax No. 608 of 2020

M/S R.J. Exim, Meerut & Anr. ..Petitioners
Versus
The
Prin.
Comm.
Central
Good
and
Services Tax & Ors. ...Respondents

Counsel for the Petitioners:
Sri Vikrant Rana

Counsel for the Respondents:
Sri B.K. Singh Raghuvanshi

(A) Civil Law -Central Goods and Service
Tax Act, 2017: Section 70, 83, 74(5) -
CGST Rules, 2017: Rule 142(1A), 159(5) -
Section 74(5) of the Act affords an opportunity
to a person chargeable with tax, before service
of notice under sub-section (1), to pay the
amount of tax and interest under Section 50
and penalty of such tax on the basis of own
ascertainment of such tax or the tax ascertained
by the proper officer. The proper officer issued
an intimation letter dated 22.07.2020 providing
an opportunity to the petitioner to file an
objection, but the petitioners have failed to do
so. The impugned provisional attachment order
has been issued by the competent authority
under Section 83 of the Act, against which also
the petitioner had the opportunity to file an
objection under sub-Rule 5 or Rule 159 of the
Rules, but they failed to file any objection.
1 All. M/S R.J. Exim, Meerut & Anr. Vs. The Prin. Comm. Central Good & Services Tax & Ors. 687
Therefore, impugned orders cannot be said to suffer
from any manifest error of law. (para 10, 11)

Writ Petition Rejected. (E-8)

List of Cases cited :-

1. Bindal Smelting Pvt. Ltd. Thru. Its Director Vs
Additional Director General, directorate General
of GST Intelligence CWP No. 31382 of 2019
(O&M)
(Punjab
&
Haryana
High
Court)
(distinguished)

2. Kaish Impex Pvt. Ltd. Through its Director Vs
The Union of India, through the Secretary,
Department of Legal Affairs, Ministry of Law &
Judge
&
Ors.
(Bombay
High
Court)
(distinguished)

3. Kushal Ltd. Vs U.O.I. R/Special Civil
Application No. 19533 of 2019 (Gujarat High
Court) (distinguished)

4. CWP No. 11961 of 2020 (O&M) (Punjab &
Haryana High Court) (distinguished)

(Delivered by Hon'ble Surya Prakash
Kesarwani, J. & Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard learned counsel for the
petitioners
and
Sri
B.K.Singh.
Raghuvanshi, learned counsel for the
respondents.

2. This writ petition has been filed
praying to quash the impugned orders dated
22.07.2020 and 05.02.2020 passed by the
respondent no.2 in exercise of powers
conferred under Section 83 of the Central
Goods and Services Tax Act, 2017.
Petitioners have further prayed to issue a
direction to the respondents concerned to
release
forthwith
the
provisional
attachment of the current and saving bank
account (Nos.) 306001010028200 and
3060020140796 respectively relating to
PAN No.AAMPJ7368L in Union Bank of
India, and also to release the FDR dated
24.10.2019 of Rs. 25 Lacs issued in the
name of Principal Commissioner, CGST,
Meerut in favour of the petitioners.

3. Learned counsel for the petitioners
submits that as only show cause notice
under Section 70 of the Central Goods and
Services Tax Act, 2017 has been issued, the
attachment under Section 83 of CGST Act
can not be made. Consequently, the
impugned orders of provisional attachment
are bad and it is liable to be quashed.

4. We have carefully considered the
submissions of the learned counsel for the
parties.

5. From the record, we find that
order dated 22.07.2020 was issued by the
proper
officer
to
the
petitioners,
informing GST DRC-01A under Section
74(5) of the Act, requiring the petitioners
to deposit the ascertained amount of Rs.
69,67,729/- + interest @ 24%+ penalty @
15% or to submit objection under Section
74(1) of the Act. An opportunity was also
given by fresh notice so that petitioners
may file an objection against the above
ascertainment by 14.08.2020 in Part B of
this Form.

6. Learned counsel for the petitioners
has stated that petitioners have not
submitted
any
objection
against
the
ascertainment dated 22.07.2020 issued by
the proper officer, which was followed by
the impugned provisional attachment order
dated 22.07.2020 issued by the Assistant
Commissioner, Central Goods and Service
Tax Division-I , Meerut.

7. Aggrieved against the aforesaid
provisional attachment, petitioners have
filed the present writ petition.
688 INDIAN LAW REPORTS ALLAHABAD SERIES

8. From the record, it appears that
petitioner No.1, M/s R.J. Exim purchased
Readymade
Garments
worth
Rs.
06,50,32,128/-involving
IGST
Rs.69,67,729/- from the supplier M/s
Unimax
Overseas,
WZ-98,
Lamba
Complex Jwala Heri, Paschim Vihar, Delhi
West. The aforesaid purchase was shown
through
six
invoices,
which
were
mentioned in the intimation of the proper
officer dated 22.07.2020. Petitioners took
credit of the aforesaid IGST amount of Rs.
69,67,729/-. On verification the aforesaid,
M/s Unimax Overseas, WZ-98, Lamba
Complex Jwala Heri, Paschim Vihar, Delhi
West was found non existent.

9. For the purposes of controversy
involved in the present writ petition, the
provisions of Sections 74(5), Section 83,
Rules 142 (1A) and Rule 159(5) of the
CGST Act, 2017 relevant which are
reproduced below:-

"Section 74 - Determination of tax
not paid or short paid or erroneously
refunded or input tax credit wrongly
availed or utilised by reason of fraud or
any wilful misstatement or suppression of
facts

74 (5 ) The person chargeable with tax
may, before service of notice under subsection (1), pay the amount of tax along with
interest payable under section 50 and a
penalty equivalent to fifteen per cent. of such
tax on the basis of his own ascertainment of
such tax or the tax as ascertained by the
proper officer and inform the proper officer
in writing of such payment.

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).

Rule 142 (1A) The proper officer shall,
before service of notice to the person
chargeable with tax, interest and penalty,
under sub-section (1) of Section 73 or subsection (1) of Section 74, as the case may be,
shall communicate the details of any tax,
interest and penalty as ascertained by the
said officer, in Part A of FORM GST DRC01A.

(2) Where, before the service of notice
or statement, the person chargeable with tax
makes payment of the tax and interest in
accordance with the provisions of sub-section
(5) of section 73 or, as the case may be, tax,
interest and penalty in accordance with the
provisions of sub-section (5) of section 74, or
where any person makes payment of tax,
interest, penalty or any other amount due in
accordance with the provisions of the Act,
whether on his own ascertainment or, as
communicated by the proper officer under
sub-rule (1A), he shall inform the proper
officer of such payment in FORM GST DRC03 and the proper officer shall issue an
acknowledgement, accepting the payment
made by the said person in FORM GST
DRC-04.

(2A) Where the person referred to in
sub-rule(1A) has made partial payment of
the amount communicated to him or desires
to file any submissions against the
proposed liability, he may make such
submission in Part B of FORM GST DRC01A.
1 All. M/S R.J. Exim, Meerut & Anr. Vs. The Prin. Comm. Central Good & Services Tax & Ors. 689

Rule 159 (5) Any person whose
property is attached may, within seven days
of the attachment under sub-rule (1), file an
objection to the effect that the property
attached was or is not liable to attachment,
and the Commissioner may, after affording
an opportunity of being heard to the person
filing the objection, release the said
property by an order in FORM GST DRC23."

10. From the perusal of Section
74(5) of the Act, it is evident that a
person chargeable with tax may, before
service of notice under sub-section (1),
pay the amount of tax and interest under
Section 50 and penalty @ 15% of such
tax on the basis of own ascertainment of
such tax or the tax as ascertained by the
proper officer and inform the proper
officer in writing of such payment. The
intimation dated 22.07.2020 issued by the
proper officer to the petitioners is
referable to Section 74(5) of the Act and
Rule 142(1A) of the Rules. The proper
officer
afforded
opportunity
to
the
petitioners to file an objection, but the
petitioners have not filed any objection.

11.

The
impugned
Provisional
attachment order has been issued by the
competent authority under Section 83 of
the Act for the purpose of protecting
interest
of
the
Government
revenue.
Against the order of Provisional attachment
under Section 83(1) of the Act, the
petitioners have an opportunity to file an
objection under sub-Rule 5 of Rule 159 of
the Rules. It has been admitted before us by
learned counsel for the petitioners that the
petitioners have not filed any objection
against
the
impugned
provisional
attachment dated 22.07.2020. Therefore,
the impugned orders cannot be said to
suffer from any manifest error of law.

12.

Learned
counsel
for
the
petitioners has relied upon a judgment of
Punjab & Haryana High Court dated
20.12.2019 in CWP No. 31382 of 2019
(O&M)
(Bindal
Smelting
Pvt.
Ltd.
Through its Director Versus Additional
Director General, Directorate General of
GST Intelligence) . Relevant para 10 of the
judgment is reproduced below:-

"10. Applying the above quoted
provisions of CGST Act, 2017 and taking
cue from afore-cited judgments of Gujarat
High Court, which has noticed consistent
judicial pronouncement and Bombay High
Court, we find that in the present case
attached account is Over Cash Credit
account and Petitioner had debit balance
of Rs.6.42 Crore, thus question arises that
whether continuation of attachment would
protect interest of revenue or not. The
Petitioner is running unit and more than
100
families
are
dependent
upon
Petitioner. Till date no proceedings under
Section 74 of CGST Act are pending
which would start as soon as show cause
notice is issued. The Respondent has seized
record of the Petitioner who has further
supplied various documents as well put
personal appearance through Directors
and employees.

The object and intention of legislature
to endow Commissioner with power of
attachment under Section 83 is very clear.
It is drastic and far-reaching power which
must be used sparingly and only on
substantive weighty grounds and reasons.
The power should be exercised only to
protect interest of revenue and not to ruin
business of any taxable person. Primarily
Section 83 permits to attach property.
Property means an asset which may be
movable, immovable, tangible, intangible
or in the form of some instrument. Cash in
hand as well bank account is property, in
690 INDIAN LAW REPORTS ALLAHABAD SERIES
the form of liquidity which is better than
immovable property and directly affects
working in the form of working capital of a
dealer. A dealer may be having 15 of 17
CWP No.31382 of 2019(O&M) #16# cash
in hand or in account in the form of fixed
deposit or saving account. The mandate of
Section 83 in our considered opinion is to
attach amount lying in an account in the
form of FDR or saving and it cannot be
intention or purport of Section 83 to attach
an account having debit balance. No
purpose leaving aside securing interest of
revenue is going to be achieved except
closure of business which cannot be
permitted unless and until running of
business itself is prohibited by law. The
contention of Respondent that they have
power to attach bank account irrespective
of
nature
of
account
cannot
be
countenanced.

We are of the opinion that Respondent
can attach an account only if there is some
balance in the form of FDR or savings. The
power of attachment of bank account cannot
be exercised as per whims and caprices of the
Authority. The Commissioner is bound to
ensure that by attachment of property or
bank account, interest of revenue is going to
be protected. In case a property is mortgaged
with bank and value of property is less than
outstanding dues of bank, provisional
attachment is meaningless and action
remains only on paper. In the absence of
record showing that interest of revenue is
protected by attaching property or bank
account, action deserves to be declared as
taken without application of mind and
formation of opinion on the basis of cogent
material. Thus, attachment of current account
having debit balance does not protect interest
of revenue, instead merely ruins the business
of a dealer. Such an action of attachment of
"over cash credit" account for the sake of
recovery of confirmed demand, may in some
peculiar case, may be still permitted but not at
the stage of pending investigation".

13. In the aforesaid judgment, it is
mentioned that the OCC account utilizing
credit limit to the tune of Rs. 6.42 Crore was
attached and there was debit balance of Rs.
6.42 Crore. On these facts it was held in para
10 of judgment that mandate of section 83 is to
attach amount lying in an account in the form
of FDR or saving and it cannot be intention or
purport of Section 83 to attach an account
having debit balance. In the present set of
facts, the saving bank account of the
petitioners
being
account
Nos.
30600101002800
and
3060020140796
relating to PAN No.AAMPJ7368L in Union
Bank of India have been attached. Thus, the
aforesaid judgment relied by learned counsel
for the petitioners has no bearing on facts of
the present case.

14. The judgment dated 17.01.2020 of
Bombay High Court in Writ Petition No.
3145 of 2019 (Kaish Impex Private Limited
through its Director Vs. The Union of India,
through the Secretary, Department of Legal
Affairs, Ministry of Law & Judge and
others) relied by the learned counsel for the
petitioners, also does not support the case of
the petitioners. Relevant para 12 of the
aforesaid judgment is reproduced below:-

"Para 12. The judgment order dated 22
October, 2019 proceeds on the assertion that
proceedings have been launched against the
petitioner under Section 67 and 70 of the Act.
As far as section 67, i.e. search is concerned, it
is an uncontroverted position that no
proceedings have been initiated against the
petitioner under section 67 of the Act. On the
date of provisional attachment of the bank
account, only a summon under of the Act was
issued to the petitioner. Section 70 is not
mentioned in Section 83 of the Act. No
1 All. M/S Indian Oil Corporation Ltd. Vs. Union of India & Ors.
691
proceedings
were
pending
against
the
petitioner under section 62, 63, 64,73 and 74
of the Act. Thus the petitioner contends that
power under section 83 could not have been
invoked against the petitioner".

15. Perusal of the aforesaid judgment in
the case of Kaish Impex Pvt. Ltd.(Supra)
shows that provisional attachment order was
issued on the ground that proceedings under
Sections 67 and Section 70 of the Act have
been launched but in fact, it was found that
no proceeding was initiated under Section 83
of the Act and only summon was issued for
provisional attachment of the bank account.
On these facts, provisional attachment was
held to be bad. The facts of the present case
are entirely different.

16. The judgment dated 17.12.2019 of
Gujarat High Court at Ahmedabad in
R/Special Civil Application No. 19533 of
2019 ( Kushal Ltd. Versus Union of India)
relied by the learned counsel for the
petitioners, also does not support the case of
the petitioners. Relevant para 14 of the
aforesaid judgment is reproduced below:-

"Para 14. On a plain reading of section
83 of the GST Acts, it is clear that a sine qua
non for exercise of powers thereunder is that
proceedings should be pending under section
62 or section 63 or section 64 or section 67
or section 73 or section 74 of the GST Acts.
In the present case, the proceedings under
section 67 of the GST Acts are no longer
pending and pursuant to the search,
proceedings under any of the other sections
mentioned in Section 83 have not been
initiated. Under the circumstances, on the
date when the orders of provisional
attachment came to be made, the basic
requirement for exercise of powers under
section 83 of the GST Acts was not satisfied.
The provisional attachment of the bank
accounts of the petitioners under section 83
of the GST acts is, therefore, not in
consonance with the provisions thereof and
cannot be sustained."

17. In the aforesaid judgment in the
case of Kaushal Ltd. (Supra), it was held that
no proceeding under Section 67 of the Act
was pending and, therefore, provisional
attachment was held to be bad. In the present
case, facts are entirely different.

18. In Judgment dated 09.09.2020 of
Punjab and Haryana High Court at
Chandigarh in CWP No. 11961 of 2020
(O&M) , Court as a matter of fact had found
that on the date of Provisional attachment
order under Section 83 of the Act,
proceedings under Section 67 of the Act were
over. On these facts, the Court found the
attachment order to be bad. Thus, this
judgment is also distinguishable on facts of
the present case.

19. For all the reasons stated above, we
do not find any merits in this writ petition.
Consequently, the writ petition fails and is
hereby dismissed.
----------
(2021)01ILR A691
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.12.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ Tax No. 646 of 2020

M/S Indian Oil Corporation Ltd.
 ...Petitioner
Versus
Union of India & Ors. ...Respondents