Parliament Intended GST As Citizen-Friendly Tax Structure, But Its Purpose Lost by The Manner in Which It Is Enforced - Supreme Court

5/17/2021 Parliament Intended GST As Citizen-Friendly Tax Structure, But Its Purpose Lost by The Manner In Which It Is Enforced:
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Home / Top Stories / Parliament Intended...
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Parliament Intended GST As Citizen-Friendly

Tax Structure, But Its Purpose Lost by The
Manner In Which It Is Enforced: Supreme
Court
Mehal Jain 6 April 2021 7:42 PM
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5/17/2021 Parliament Intended GST As Citizen-Friendly Tax Structure, But Its Purpose Lost by The Manner In Which It Is Enforced: Supreme …
"The Parliament had intended the GST to be a citizen-friendly tax structure. The
purpose of the Act is lost by the manner in which tax law is enforced in our country ",
observed Justice DY Chandrachud on Tuesday.
The bench of Justices Chandrachud and M. R. Shah were dealing with contours of the
power of provisional attachment of property, including bank accounts, to protect
revenue, under the Himachal Pradesh GST Act, 2017. Section 83 of the said Act
provides that where during the pendency of any proceedings under the Act, the
Commissioner is of the opinion that for the purpose of protecting the interest of the
Government revenue, it is necessary so to do, he may, by order in writing attach
provisionally any property, including bank account, belonging to the taxable person.
Also Read - Contempt Petitions Filed Before Supreme Court For Alleged 'Wilful
Violation' Of SC's Order On Non- Declaration Of NPAs
"The earlier view was that the 'opinion' should be a subjective opinion. Now, the position is that there
should be some tangible material to form the opinion. Although 'order in writing' does not mean that
the order should be like a judgement, but it must show an application of mind...A balance has to be
maintained between protecting the interests of revenue and protecting genuine business", the bench had
opined at the outset.
Also Read - Supreme Court Weekly Roundup May 10 To May 16, 2021
"The country needs to come out of this tax culture that 'businesses are all fraudulent'!
Even where 12 crore tax has been paid, just because some tax is still due, you can't
start attaching property! If there is any alienation of assets or the assessee is winding
up or going into liquidation, it is understandable...but just because you have the
account numbers, you can't start attaching and even block the receivables!", remarked
Justice Chandrachud.
Also Read - Delhi Police Arrests Businessman Navneet Kalra In Delhi Oxygen
Concentrators Hoarding Case
The judge spoke of introducing a mechanism of assessment of the tax o cers with a
view to inculcate accountability- "Tax o cers raise huge demands after assessment –
of 10,000 crores! If this is reduced to 1000 crores by the Appellate Tribunal or the
Supreme Court, it must go into the assessment of the tax o cer! There is no
accountability at all", re ected Justice Chandrachud.
"The problem is in the ne print. In order to make the GST Act workable, the message
must percolate to the actual authorities- Why the legislation has made certain
provisions, what is the purpose behind them?...For example, the Act provides for ling
of an appeal from any order on a deposit of that tax, interest and penalty which is
undisputed, plus 10% of the balance", continued the judge.
Also Read - Remand Power U/s 167 CrPC Can Also Be Exercised By Courts Superior
To Magistrate: Supreme Court
Justice Chandrachud also criticised the exercise of the power of provisional
attachment as a "pre-emptive strike"- "The law is that when it is necessary to protect
the interest of revenue, because there is a likelihood that revenue will not be able to
enforce the assessment order, there may be an order for provisional attachment. You
cannot just go on attaching only because there is to be an assessment order! It
cannot be a pre-emptive strike!"
The bench also pulled up the respondent-authorities in the instant case over the stand
that providing an opportunity for hearing in connection with an order of attachment
was a discretion-"How can you le such a counter-a davit? The rules say that the
assessee will be given an opportunity for ling objections and of a hearing!"
"This is a draconian law. It needs to be structured. The tax authorities have to abide by
the mandate of the law, the letter and the spirit of the law. This is a very important
issue. That is why we are taking this up, because once we laid down the law, it applies
to the entire country", said Justice Chandrachud.
In the instant case, on 19 January 2019, a provisional attachment was levied under
Section 83 of the Himachal Pradesh Goods and Services Tax Act 2017. On 30 January
2019, the provisional attachment was lifted after the petitioner had submitted a
representation under Rule 159(5). Yet on 28 October 2020, a fresh order of provisional
attachment was passed based on allegations pertaining to the same period and
cause of action. The petitioner submitted a representation on 4 November 2020
speci cally seeking an opportunity of being heard; and an order was passed on 6
November 2020 rejecting the representation and con rming the provisional
attachment without dealing with the issues which have been raised by the petitioner
and without furnishing an opportunity of being heard.
On the above foundation, it has been submitted before the Supreme Court that the
power to order a provisional attachment under Section 83 is a draconian power and
strict compliance with the provisions of the statute is necessary. In the present case, it
has been submitted that the petitioner has paid as much as Rs 12 crores towards
revenue demands of the State in the assessment year and there was no question of
the provisional attachment being necessitated to protect the interest of the revenue.
TAGS SUPREME COURT GOODS AND SERVICE(GST) ACT PARLIAMENT
JUSTICE D Y. CHANDRACHUD JUSTICE M. R. SHAH
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Contempt Petitions Filed Before Supreme

Court For Alleged 'Wilful Violation' Of SC's
Order On Non- Declaration Of NPAs
Srishti Ojha 17 May 2021 10:53 AM
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Supreme Court has been moved by two Companies seeking punishment to
contemners for outing the top Court's order dated 3rd Sept 2020 whereby it had
declared that " accounts which were not declared NPA till 31st August 2020 shall not
be declared NPA till further orders "
The plea has sought issuance of notice to the contemnors for having wilfully
violated the order and directions dated 3rd Sept 2020 passed by the Supreme
Court, punish the contemnors for having committed contempt of the top Court.
The plea led by Aslam Trading Company has impleaded as respondents, Mr

Shaktikant Das, the Governor of Reserve Bank of India, Mr Sunil Mehta, Chief
Executive of Indian Banks Association and the Chief Manager of Canara Bank.
The plea by Tarun Polymers has as respondents Mr Shaktikant Das, the Governor of
Reserve Bank of India, Mr Sunil Mehta, Chief Executive of Indian Banks Association
and Mr Shashi Ranjan Giri, the Authorised o cer of Indian Bank Allahabad.
The plea has stated that Supreme Court had passed a common order in batch of
petitions on 3rd September 2020 whereby the court had directed and declared that
the accounts which were not declared NPA till 31st August 2020 shall not be
declared NPA till further orders
The plea has cited the top Court's direction whereby the Court had noted that "
"Upon hearing the counsel the Court made the following ORDER : At the request of
the Mr. Tushar Mehta, learned Solicitor General, the matter is adjourned for
10.09.2020. Mr. Harish Salve, learned Senior Advocate, submitted that no account
shall become NPA at least for a period of two months. In view of the above, the
accounts which were not declared NPA till 31.08.2020 shall not be declared NPA till
further orders."
The petitioner, Aslam Trading Company has stated that it was granted by the Bank
from time to time, various credit facilities by way of nancial assistance against
various assets creating security interest in favour of the Bank. The instalments of the
loan were being paid regularly and his account was not turned NPA till 31st August
2020.
However, on 30th April 2021, a Demand Notice under section 13 (2) of the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 to Aslam Trading Company demanding an amount of Rs. 1, 84,
23,701.35/- as on 30th April 2021 inclusive of interest up to 30th April.
Similar notice was issued to Tarun Polymers by the Bank on 9th April 2021
demanding an amount of more than 5 crores as on 31st March 2021 inclusive of
interest upto 31st March.
The pleas have stated that both Aslam Trading Company and Tarun Polymers were
unilaterally classi ed as NPA by the respondents on 12th November 2020 and 28th
Sept 2020 respectively, under section 13 (2) of the SARFAESI Act. However, no
Show cause Notice was given.
Further, it's been stated that the Demand Notice along with such demand for the
defaulted amount provided with the threat of recovering the possession of the
petitioners if within 60 days of the Notice the payment was not made by the
Petitioner.
The pleas have argued that despite Supreme Court's stay order dated 3rd
September 2020 which was passed in presence of all respondents, thereby making
them aware of the order, the Respondents continued to proceed under the
SARFASAI Act and deliberately outed the Court's order causing a big damage and
loss to the petitioners.
According to the petitioners, the stay order was passed in the pandemic COVID19
in the bene t of stressed borrowers so that they shall not suffer in present nancial
crises during the pandemic. Considering the slump in the petitioners' work, the Stay
order was operating as the lifesaving Drug to them but the contemptuous act of the
Respondents has brought a major setback to them making their survival critical.
The petitioners have argued that the contemptuous act of the Respondents has not
only disobeyed the courts order but has also caused a severe irreparable damage
and loss to the petitioners.
"The petitioner has lost his image and has been defamed as the possession Notice
was published in the new papers of his locality which made the dignity of the
petitioner lower." The pleas state
According to the petitioners the contemptuous act of the Respondents has shaken
the con dence of the public and has degraded the trust of the borrowers, and is
very disgraceful and contemptuous.
Supreme Courts 3rd September order: Supreme Court bench of Justices Ashok
Bhushan, R. Subhash Reddy & MR Shah had through its order, protected those
accounts from being declared as Non-performing Assets (NPAs) which were not
classi ed as NPAs on August 31 till case was disposed off.
The Court was hearing plea(s) seeking extension of the Covid19 induced loan
moratorium & waiver of accruing interest. While adjourning the case for a week, the
court har granted protection to petitioners to the extent of not being declared as
NPA's till the case is disposed off.
The court also stated that it was of the primary view that certain directives have to
come from the RBI.
"What you do, that is for you to decide. Some things have to decided by the GOI or
by the RBI. Everything cannot be left to the banks" - Court had said.
TAGS SUPREME COURT NON-PERFORMING ASSET (NPA) SARFAESI ACT RBI
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Parliament Intended GST As Citizen-Friendly Tax Structure, But Its Purpose Lost by The Manner in Which It Is Enforced - Supreme Court

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5/17/2021 Parliament Intended GST As Citizen-Friendly Tax Structure, But Its Purpose Lost by The Manner In Which It Is Enforced:

Hi, HNLU Logout

BOOKMARKS TOP STORIES NEWS UPDATES COLUMNS INTERVIEWS

Parliament Intended GST As Citizen-Friendly

observed Justice DY Chandrachud on Tuesday.

power of provisional attachment of property, including bank accounts, to protect

Government revenue, it is necessary so to do, he may, by order in writing attach

Violation' Of SC's Order On Non- Declaration Of NPAs

opined at the outset.

up or going into liquidation, it is understandable...but just because you have the

Concentrators Hoarding Case

accountability at all", re ected Justice Chandrachud.

undisputed, plus 10% of the balance", continued the judge.

To Magistrate: Supreme Court

Justice Chandrachud also criticised the exercise of the power of provisional

attachment as a "pre-emptive strike"- "The law is that when it is necessary to protect

cannot just go on attaching only because there is to be an assessment order! It

cannot be a pre-emptive strike!"

that providing an opportunity for hearing in connection with an order of attachment

assessee will be given an opportunity for ling objections and of a hearing!"

to the entire country", said Justice Chandrachud.

cause of action. The petitioner submitted a representation on 4 November 2020

and without furnishing an opportunity of being heard.

power to order a provisional attachment under Section 83 is a draconian power and

TAGS SUPREME COURT GOODS AND SERVICE(GST) ACT PARLIAMENT

JUSTICE D Y. CHANDRACHUD JUSTICE M. R. SHAH

0 Comments Sort by Newest

Facebook Comments Plugin

Contempt Petitions Filed Before Supreme

Supreme Court has been moved by two Companies seeking punishment to

be declared NPA till further orders "

The plea led by Aslam Trading Company has impleaded as respondents, Mr

TAGS SUPREME COURT NON-PERFORMING ASSET (NPA) SARFAESI ACT RBI

Supreme Court Weekly Delhi Police Arrests

16, 2021 Kalra In Delhi Oxygen

Supreme Court Bar Lost

Plea In Supreme Court Seeks

Supreme Court Weekly Roundup May 10 To May 16, 2021

8 Law On Reels : Krammer v. Krammer

सीआरपीसी 167 के तहत रमांड श का इ ेमाल मिज े ट से व र अदालत भी कर सकती ह :

उ र दे श की िच कूट जेल म ई ह ाओं की तं जांच कराने के िलए सु ीम कोट म यािचका

सु ीम कोट वीकली राउं ड अप : जािनए कैसे रहा िपछला स ाह

2 Google v. Oracle : Perspectives on Copyright, Fair Use and Industry Implications

1 "Quality Of Flowing Water Can't Be Compromised", Madras HC Directs State To

2 NGT Directs Chief Secretary, Delhi To Take Decision At Higher Administrative

3 "All Isn't Well In Sundarbans": Calcutta High Court Directs Administration To

1. Additional General Manager (Legal) Vacancy At Chennai Metro Rail Limited

2. Assam Judicial Service (Grade-I) Examination 2021

3. State Tax O cer Vacancy At Kerala Government Service

4. JAG Entry Scheme (JAG 27) Recruitment 2021

JUST ENTER YOUR EMAIL FOR THE

Enter Your Email

TOP STORIES KNOW THE LAW

NEWS UPDATE LAW FIRMS

COLUMNS JOB UPDATES

INTERVIEWS BOOK REVIEWS

INTERNATIONAL EVENTS CORNER

RTI UPDATES COVER STORY

EDITOR'S PICK PLACEMENTS

LAW SCHOOL CORNER SCHOLARSHIPS

CALL FOR PAPERS ENVIRONMENT

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© All Rights Reserved @LiveLaw