Summary
Provisional GST attachment was quashed for failure to meet strict statutory safeguards, absence of pending specified proceedings against the assessee and denial of a hearing on objections. The Commissioner’s opinion must rest on tangible material showing attachment is necessary and proportionate to protect revenue. The delegated attachment order was not appealable under Section 107(1), so the writ was maintainable. The separate tax-assessment merits remained open in appeal.
Issues
- Whether a writ challenging the delegated provisional-attachment order was barred by an alternative statutory appeal.
- What necessity, evidentiary and procedural safeguards governed Section 83 attachment.
- Whether proceedings against a supplier, or a later assessment against the assessee, sustained the attachment.
Provisions considered
- Article 226, Constitution of IndiaHeld the writ maintainable and restated that alternative remedy is a discretionary restriction with recognised exceptions, not an absolute jurisdictional bar. (¶¶ 25-28, 59-64)
- Sections 2(4), 83 and 107(1), (6), (7), as applicable, Himachal Pradesh Goods and Services Tax Act, 2017Strictly construed attachment prerequisites, held no Section 107(1) appeal lay from the Commissioner’s delegated order, and applied the assessment-appeal payment and recovery-stay scheme. (¶¶ 39-51, 60-62, 67-72)
Held
- The Joint Commissioner exercised the Commissioner’s delegated Section 83 power. Because the Commissioner was excluded from “adjudicating authority”, this order was not appealable under Section 107(1). The High Court erred in declining the writ on that basis. (¶¶ 60-62, 72(i)-(iii))
- Alternative remedy ordinarily warrants restraint, but does not divest Article 226 jurisdiction. Recognised exceptions include enforcement of fundamental rights, breach of natural justice, proceedings wholly without jurisdiction and challenges to legislative validity. Exhaustion remains a rule of policy, convenience and discretion. (¶ 25-28)
- Section 83 imposed strict cumulative requirements. The Commissioner had to form an opinion before attachment, based on tangible material and a live nexus demonstrating necessity to protect revenue; mere expediency or availability of attachable property was insufficient. The nature and extent of attachment had to be proportionate to that purpose. (¶¶ 39-51, 72(iv)-(viii))
- Under Rule 159(5), objections and an opportunity of being heard were cumulative safeguards, followed by a reasoned order communicated to the assessee. Excessiveness, the property’s nature and proposed alternative security also required consideration, though the assessee could not insist on acceptance of a particular security. (¶¶ 54-56, 63-64, 72(ix)-(x))
- The file disclosed no tangible basis for necessity. Under the then applicable Section 83, specified proceedings had to be pending against the person whose property was attached; concluded proceedings against its supplier did not suffice. Repeating a withdrawn attachment on the same grounds without changed circumstances supplied a further defect. (¶¶ 65-68, 71)
- Final assessment under Section 74 ended the relevant pendency and the provisional attachment had to cease. The assessment appeal attracted Section 107(6) payment requirements and the statutory stay of balance recovery under Section 107(7). The Court did not decide the correctness of the assessment or input-credit entitlement. (¶¶ 22, 69-70, 72(xi)-(xii))
Result
Appeal and writ petition allowed; High Court judgment and provisional-attachment orders dated 28 October 2020 set aside. Separate assessment merits left to the statutory appeal; no costs; pending applications disposed of.