Provisional Attachment lifted as assessee agreed to pay tax liability in installments

The Hon'ble Gujarat High Court in NirajkumarNareshkumarLakhyani v. State of Gujarat [Special civil application no. 6777 of 2023 dated April 27, 2023] set aside the order of Adjudicating Authority and allowed the assessee to make payment of tax liability in installments and thereby lifted the provisional attachment of bank account of the assessee.

Facts

NirajkumarNareshkumarLakhyani("the Petitioner") is engaged in the business of trading in metal scrape. The Department visited the business premises of the Petitioner on November 29, 2022 to enquire about the details of certain purchases, but the premises of the Petitioner was closed.

A summon was issued on November 30, 2022 under section 70(1) of the Central Goods and Services Tax Act, 2017 ("the CGST Act") and Adjudicating Authority pass an order dated April 25, 2023 ("the Impugned order") to provisionally attach the current Bank Account, No. 045361900003074 of the Petitioner held with the YES Bank Limited, on November 30, 2022.

The Petitioner contended that he is willing to make pay the liability of INR  2,13,04,290/- (CGST Rs. 1,06,52,145/- + SGST Rs. 1,06,52,145/-) in 15 (fifteen) equal monthly instalments commencing from May, 2023.

Aggrieved with the Impugned order the Petitioner filed a writ petition in Gujarat High Court to set aside the Impugned Order passed by the Adjudicating Authority.

Issue

Whether the Provisional Attachment can be lifted as assessee agreed to pay tax liability in installments?

Held

The Hon'ble Gujarat High Court in Special civil application no. 6777 of 2023 held as under:

• Observed that, the Petitioner has expressed his willingness to pay the demand raised by the Adjudicating Authority within span of 15 equal monthly installments commencing from May, 2023
• Held that, the attachment of the current bank account of the Petitioner shall be lifted forthwith.
• Set aside the Impugned Order.

Our Comments

In a similar case, the Hon'ble Kerala High Court in the matter of Pazhayidom Food Ventures (P) Ltd v. Superintendent Commercial Taxes [WP(C). No. 14275 of 2020 dated July 24, 2020], had directed the respondent tax authority to accept the belated returns and permitted the Petitioner therein to discharge the balance tax liability inclusive of any interest and late fee thereon, in equal monthly instalments commencing from August 25, 2020 and culminating on March 25, 2021.