PRATIK MAHENDRA GANDHI Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioner has challenged an order dated February 6, 2013 as at annexure A to the petition passed by respondent No. 2 under section 45 of the Gujarat Value Added Tax Act, 2003 ("the VAT Act", for short). Under such order, respondent No. 2 has provisionally attached the bank account and the petitioner's stock of brass scrap in which the petitioner is dealing with, pending assessment of the petitioner's liability to pay value added tax with interest and penalties. The learned counsel for the petitioner submitted that the powers under section 45 of the VAT Act are drastic. The exercise thereof should be confined to the rare and exceptional cases. In the present case, there is no material to suggest that there is any outstanding duty remained against the petitioner. Learned counsel for the petitioner further submitted that the petitioner has been dealing in brass scrap and other similar items, since several years. The petitioner is enjoying registration by the VAT authority. At the time of spot visit of the petitioner's business premises by the officials of the respondent-authorities also, the physical stock tallied with the stock register of the petitioner. He, therefore, submitted that the petitioner is not liable to pay any additional tax. Learned counsel for the petitioner further pointed out that the respondents are relying on cancellation of registration of some of the dealers from whom the petitioner has purchased such goods to deny the tax credited thereof to the petitioner. He submitted that all purchases were made prior to the cancellation of registration and therefore, such denial is completely unjustified.

(2.) On the other hand, learned Assistant Government Pleader Mr. Jaimin Gandhi for the respondents opposed and contended that the purchases made by the petitioner were not genuine. The investigation revealed that in some cases where dealers from whom such purchases were said to have been made were bogus. In some cases, the transportation and weighing location did not match with the actual purchase and movement of goods.

(3.) Since, the assessments are pending, as stated by the learned Assistant Government Pleader, we would not like to make any conclusive statement in respect of rival contentions. Further, we cannot ignore the fact that an order of provisional assessment under section 45 of the Act pending, attachment before the judgment is a drastic measure. In our opinion, a workable formula can be provided under which, the petitioner may restart the business subject to further investigation and assessment.