Page 89 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] BINDAL SMELTING PVT. LTD. v. ADDL. DIR. GEN., DIRECTORATE GEN. OF GST 599
Credit Account would at all be sustainable in view of the ratio laid
down in the above noted report; even the meaningful reading of the
language employed in Section 226(3) of the said Act does not suggest
that the account like the Cash Credit or the Overdraft is capable of be-
ing attached as the bank does not become a debtor.”
9. Division Bench of Bombay High Court in case of Sargam Foods (P.) Ltd.
v. State of Maharashtra [WP No. 4313 of 2008, dated 8-7-2010] also considered
the similar issue and set aside the attachment of the petitioner’s cash credit account
for recovery of the unpaid taxes.
10. Such being the consistent view of various High Courts of the country,
we have no hesitation in adopting similar line, also looking to the phraseol-
ogy used in the statutory provisions contained in sub-section (3) of Section
226.
11. In the result, impugned notice of attachment dated 15-9-2014 is set
aside. Petition is disposed of accordingly.”
(Emphasis supplied)
9. Gujarat High Court while dealing with question of provisional at-
tachment of property and bank account in the case of Valerius Industries v. Union
of India - 2019-TIOL-2094-HC-AHM-GST = 2019 (30) G.S.T.L. 15 (Guj.) in Para 52
has concluded as under :
“52. Our final conclusions may be summarized as under :
1. The order of provisional attachment before the assessment order
is made, may be justified if the assessing authority or any other au-
thority empowered in law is of the opinion that it is necessaiy to pro-
tect the interest of revenue. However, the subjective satisfaction
should be based on some credible materials or information and also
should be supported by supervening factor. It is not any and every
material, howsoever vague and indefinite or distant remote or
farfetching, which would warrant the formation of the belief.
2. The power conferred upon the authority under Section 83 of the
Act for provisional attachment could be termed as a veiy drastic and
far-reaching power. Such power should be used sparingly and only
on substantive weighty grounds and reasons.
3. The power of provisional attachment under Section 83 of the Act
should be exercised by the authority only if there is a reasonable ap-
prehension that the assessee may default the ultimate collection of the
demand that is likely to be raised on completion of the assessment. It
should, therefore, be exercised with extreme care and caution.
4. The power under Section 83 of the Act for provisional attachment
should be exercised only if there is sufficient material on record to
justify the satisfaction that the assessee is about to dispose of wholly
or any part of his/her property with a view to thwarting the ultimate
collection of demand and in order to achieve the said objective, the at-
tachment should be of the properties and to that extent, it is required
to achieve this objective.
5. The power under Section 83 of the Act should neither be used as
a tool to harass the assessee nor should it be used in a manner which
may have an irreversible detrimental effect on the business of the as-
sessee.
6. The attachment of bank account and trading assets should be re-
sorted to only as a last resort or measure. The provisional attachment
under Section 83 of the Act should not be equated with the attach-
ment in the course of the recovery proceedings.
7. The authority before exercising power under Section 83 of the Act
GST LAW TIMES  26th March 2020  185