ALI Vs. ADDITIONAL DIRECTOR GENERAL

JUDGEMENT

(1.) Petitioners are partners of a firm trading in the name and style of 'SR Trades ' (hereinafter referred to as 'the Firm '). The Firm is, primarily, in the business of purchase and sale of scrap. In the month of November 2020, there was a search conducted in the business premises of the petitioners under Sec. 67 of the CGST Act. The 1st petitioner was also arrested and detained on the allegation of fraudulent transactions, leading to the evasion of GST on a massive scale. The registration of the Firm under the CGST/SGST Acts was also cancelled. According to the petitioners, they were thus forced to close down their business in the year 2022. Ext.P1 show cause notice was issued to the petitioners on 4/5/2023, calling upon the petitioners to show cause regarding the following:-

(2.) Sri. Mayankutty Mather, the learned Senior Counsel appearing for the petitioners, on the instructions of Adv. Nikitha Susan Paulson would vehemently contend with reference to the provisions contained in Sec. 83 of the CGST/SGST Acts that, an order of provisional attachment cannot extend beyond the period satisfied in Sub-sec. (2) of Sec. 83 of the CGST/SGST Acts. He contends that, if the 1st respondent is permitted to pass fresh orders of provisional attachment after the period specified in Subsec. (2) of Sec. 83 of the CGST/SGST Acts, the same would lead to a situation where there can be no meaning in the time limit specified in Sub-sec. (2) of Sec. 83 of the CGST/SGST Acts. He submits that the language of Sub-sec. (2) of Sec. 83 of the CGST/SGST Acts does not permit any interpretation other than the interpretation that after a period of one year from the date of the first order, directing provisional attachment of properties, the order of attachment ceases to have effect and cannot be extended thereafter. It is submitted that a reading of Ext.P6 series of orders and Ext.P2 series of orders will indicate that there is not even one syllable that is different and it is thus clear that there is absolutely no application of mind by the 1st respondent and he has mechanically passed Ext.P6 series of orders, which again is illegal, even if it were to be conceded that the 1st respondent has got the authority to pass fresh orders on the expiry of the time limit specified in Sub-sec. (2) of Sec. 83 of the CGST/SGST Acts.

(3.) Learned Senior Counsel further submits that the wordings of Rule 159 of the CGST/SGST Rules, 2017 also indicates that there cannot be any order of provisional attachment that can continue beyond the period specified in Sub-sec. (2) of Sec. 83 of the CGST/SGST Acts. It is submitted that even if the orders of provisional attachment are issued in statutory printed Form (GST DRC-22) as per Rule 159(1) of the CGST/SGST Rules, 2017, the same does not absolve the authorities from giving reasons as to why the orders are required to be issued. He relied on the judgment of the learned Single Judge of this Court in K.J. Joseph and Others v. Corporation of Cochin; 1987 KHC 483, in support of this contention.