RONAK FOODS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioner has challenged the action of the respondents in attaching the petitioner's bank account and the immovable property in exercise of powers under Sec. 45 of the Gujarat Value Added Tax Act, 2003 ('the VAT Act' for short). Petitioner is a proprietary concern, engaged in dealing in food grains, ground nuts, oilseeds and other agricultural products. The petitioner is registered under the VAT Act and Central Sales Tax Act. The respondent authorities had conducted raid on the business premises of the petitioner concern on 26-9-2017, during which, it was prima facie found that petitioner was engaged in bogus billing activities. The books and accounts of the petitioner were seized. The statement of the proprietor of the petitioner concern was recorded. From the materials, it was found that the petitioner had made purchases from various dealers whose registrations were canceled. The petitioner was asked to produce the manner of delivery and payments to banking channels which the petitioner was unable to produce. According to the authorities, the estimated loss to the revenue on such bogus billing activity was more than Rs. 1 crores of principal tax excluding the interest and penalty. The petitioner was given an opportunity to remain personally present on 17-7-2017. The petitioner however did not remain present. The authorities also found that the petitioner had not filed three monthly returns. A show cause notice was therefore issued on 10-7-2017 why the registration should not be canceled. Opportunity to make representation was given, which the petitioner did not avail. The authority therefore passed an order on 28-7-2017 cancelling the registration of the petitioner with effect from 1-3-2017 for not filing the monthly returns.

(2.) It was in this background, the competent authority in exercise of powers under Sec. 45 of the VAT Act attached the petitioner's bank account, stock and the immovable property to safeguard the interest of the Revenue. In additional affidavit filed by respondent No. 3 on 19-9-2017, it is pointed out as under :

(3.) Learned Counsel for the petitioner submitted that the registration of the dealers from whom the petitioner had made purchases, was valid when the purchases were made. The registration was cancelled later on with retrospective effect. This cannot be the ground for denying tax credit to the petitioner. Counsel further submitted that the final assessment is yet to be made in case of the petitioner. At that stage, the action of the attachment of bank account, property and stock worth Rs. 15 lakhs approximately, would be too harsh. The petitioner is unable to operate the business since the bank account is attached. He submitted that on suitable conditions, the attachment of the bank account may be lifted. The petitioner may maintain a certain minimum stock in addition to the attachment of the immovable property which is valued at approximately Rs. 58 lakhs. Counsel relied on the earlier orders passed by this Court giving partial reliefs in similar cases.