The expression “necessary so to do for protecting the government revenue” implicates that the interests of the government revenue cannot be protected without ordering a provisional attachment. The honorable judgement was passed by Supreme Court of India in the case of M/s Radha Krishan Industries Versus State of Himachal Pradesh & Ors. [Civil Appeal No 1155 of 2021] by The Hon’ble Dr. Justice D.Y. Chandrachud.
This appeal arised from a judgment of a Division Bench of the High Court of Himachal Pradesh. The High Court dismissed the writ petition instituted under Article 226 of the Constitution challenging orders of provisional attachment on the ground that an alternate remedy is available. The appellant challenged the orders issued by the Joint Commissioner of State Taxes and Excise, Parwanoo provisionally attaching the appellant’s receivables from its customers. The provisional attachment was ordered while invoking Section 83 of the Himachal Pradesh Goods and Service Tax Act, 2017 and Rule 159 of Himachal Pradesh Goods and Service Tax Rules, 2017. The High Court was of the view that the appellant had an ‘alternative and efficacious remedy’ of an appeal under Section 107 of the HPGST Act. At issue in this case was whether the orders of provisional attachment issued by the third respondent against the appellant were in consonance with the conditions stipulated in Section 83 of the HPGST Act. The answer to this would require the court to embark on an interpretative journey of unravelling the substantive and procedural content of the power. The appellant manufactures lead according to the specific requirements of its clients, and had a factory at village Meerpur Gurudwara, Kala-Amb in the District of Sirmaur of Himachal Pradesh. The appellant had been in the same line of business since 2008.
The court opinioned that, “The Joint Commissioner while ordering a provisional attachment under section 83 was acting as a delegate of the Commissioner in pursuance of the delegation effected under Section 5(3) and an appeal against the order of provisional attachment was not available under Section 107 (1); The writ petition before the High Court under Article 226 of the Constitution challenging the order of provisional attachment was maintainable. The expression “necessary so to do for protecting the government revenue” implicates that the interests of the government revenue cannot be protected without ordering a provisional attachment”
The court allowed the appeal stating that, “There has been a breach of the mandatory requirement of Rule 159(5) and the Commissioner was clearly misconceived in law in coming into conclusion that he had a discretion on whether or not to grant an opportunity of being heard. The appellant having filed an appeal against the order under section 74(9), the provisions of sub-Sections 6 and 7 of Section 107 will come into operation in regard to the payment of the tax and stay on the recovery of the balance as stipulated in those provisions.”