Petitioner | Utkarsh Ispat LLP |
Respondent | State of Gujarat |
Decision By | Gujarat High Court |
Date Of Order Or Judgement | 27-January-2022 |
Citation No. | R/Special Civil Application No. 188 of 2022 2022 (1) GSTPanacea 39 HC Gujarat |
Hon’ble Judge | Justice J. B. Pardiwala |
Decision | In Favour of Assessee |
Entire Stock, Receivables of other taxable persons & immovable property of partner can’t be provisionally attached (In case of LLP). Raw materials and input required for the production or finished goods should not normally be attached by the department.
Entire Stock Can’t Be Provisionally Attached-Facts of the Case
The writ applicant is a registered limited liability partnership firm.
The GST Department undertook search proceedings at the registered premises of the writ applicant and also at the residential premises of one of the partner.
The search proceedings were undertaken on the allegation of availment of Input Tax Credit on the basis of fake invoices.
One of its partners, has prayed for the following reliefs:-
(a) To quash and set aside the order of provisional attachment of properties in FORM GST DRC-22 issued by Respondent as the same being dehors the provisions of Section 83 of the CGST Act, 2017.
(b) To issue a writ of mandamus, order or direction, as an ad-interim relief, to release the provisionally attached stock and the debtors.
Argument Before Court
Entire Stock Can’t Be Provisionally Attached-A firm and its partners are, interchangeable with each other.
If, therefore, a partnership firm incurs any liability, it is the liability of all the partners.
It is Clear that the liability of a partnership is the joint and several liability of all its partners as per Section 25 of the Partnership Act,1932.
Gujarat High Court Held
Entire Stock Can’t Be Provisionally Attached-Having regard to the principle of various Judgments this Court is of the view that the respondent was wholly unjustified in provisionally attaching a personal property owned by a partner of the firm under Section 83 of the Act, 2017.
The bank account of the taxable person can be attached against whom the proceedings under the Sections mentioned above are initiated.
Section 83 does not provide for an automatic extension to any other taxable person.
Specified proceedings have been launched against one taxable person, bank account of another taxable person cannot be provisionally attached merely based on the summons issued under Section 70 to him.
We do not approve the provisional attachment of the goods, stock and receivables.
This writ application succeeds in part.
The Form GST DRC-22 for attachment of the stock lying at the factory premises, attachment of the sundry debtors, attachment of the immovable property of Partner are hereby quashed and set aside.