Page 91 - GSTL_14th May 2020_Vol 36_Part 2

2020 ] AMAZONITE STEEL PVT. LTD. v. UNION OF INDIA 193
18. The Learned Counsel relied on the case of Shrimati Priti v. State of
Gujarat [2011 SCC Online Guj 1869] wherein the Court interpreted the scope of
Section 45 of the Gujarat Value Added Tax Act, 2003 (provisional attachment
similar to Section 83) and held that on one hand Section 45 requires the compe-
tent officer to review the situation compulsorily at least upon completion of the
period, while so doing, does not limit his discretion to exercise such powers
again if the situation so arises. Mrs. Gupta referred to another unreported judg-
ment delivered by the Gujarat High Court in the matter of Kaithal Timber Pvt. Ltd.
v. State of Gujarat and Ors. [Special Civil Application No. 14039 of 2017] wherein
the Court held that Section 45 of the Gujarat Value Added Tax Act has not barred
fresh issue of provisional attachment order and that such order could be passed
for protecting the interest of government revenue.
19. Thereafter, Mrs. Gupta drew the Court’s attention towards Rule
159(3) of the CGST Rules, 2017 which provides for release of provisional attach-
ment on payment of amount equivalent to the market price of such property or
the amount that is or may become payable by the taxable person, whichever is
lower. She further refers to Rule 159(5) of the CGST Act to which she submits
that any person whose property is attached may, within seven days of the at-
tachment under sub-rule (1), file an objection to the effect that the property at-
tached was or is not liable to attachment, and the Commissioner may, after af-
fording an opportunity of being heard to the person filing the objection, release
the said property. She submitted that the petitioner never made any application
under Rule 159, and therefore, it was clear that the petitioners’ business was not
impacted in any manner whatsoever.
20. Counsel on behalf of the respondent thereafter submitted that the
petitioner companies are shell companies that have no business of trading or
manufacturing whatsoever. Relying on the affidavit filed by the authorities, she
submitted that a company M/s. Mecon Engineering Works, Raniganj simply en-
gaged in issuance of fake invoices without supplying any goods and/services
leading to fraudulent utilization of input credit that has resulted in massive eva-
sion of GST and fraudulent availment and utilization of input tax credit. The
above company M/s. Mecon Engineering Works, Raniganj had supplied several
fake invoices to the petitioner companies. Investigation had revealed that the
three petitioner companies had also made several fake transactions with various
iron and steel manufacturing units and passed on fake input tax credit to these
companies. She further submitted that the petitioner companies were non-
existent at their registered address and on search carried out by the officers of
DGGI on Shri Sanjay Kr. Bhuwalka and Shri Neeraj Jain various incriminating
documents had been recovered and seized. She further submitted that these two
persons were controlling several companies including the petitioner companies
and had passed on approximately Rs. 40 crores of fake input tax credit. She sub-
mitted that these persons had been arrested on May 12, 2018 and have been pres-
ently enlarged on bail on furnishing personal bond of Rs. 50 lakhs each by an
order of the High Court dated October 9, 2018. Mrs. Gupta highlighted the factu-
al aspect that the erstwhile directors (directors at the time of search and seizure)
of the three petitioner companies had made statements to the investigating au-
thorities that they were dummy directors who are unemployed and had simply
submitted copies of their personal documents to Shri Bhuwalka who operated

GST LAW TIMES  14th May 2020  91