M.Arul Kumaran VS The Joint Commissioner Of GST

The court will now address the main writ petition and a related Writ Miscellaneous Petition. This order builds upon previous proceedings from December 8, 2022. The petitioner’s counsel, Mr. K. Anandharaja from M/s. Murali Law Firm, explained that the writ petition concerns the provisional attachment of immovable property belonging to two directors of ‘Royal Meridian Impex India Private Limited’, referred to as the ‘Assessee company’. This provisional attachment was made under Rule 159 of the Central Goods and Services Tax Rules, 2017, which are rules under the Central Goods and Services Tax Act, 2017.

The case revolves around the alleged wrongful availing of Input Tax Credit (ITC) under Section 74 of the Central Goods and Services Tax (C-GST) Act. The petitioner’s counsel argues that despite a provisional attachment order dated 04.11.2019 (referred to as the ‘impugned order’), neither the petitioner nor any other co-director objected immediately. Instead, objections were raised in communications dated 03.03.2020 and subsequently in 2021.

Despite numerous assertions in the supporting affidavit, the petitioner’s counsel primarily challenges the impugned order on the basis of sub-section (2) of Section 83 of the C-GST Act. This subsection stipulates that provisional attachments cease to be effective after one year from the date of the order made under sub-section (1).

In essence, the petitioner’s argument hinges on the expiration of the provisional attachment’s validity as per the statutory provision outlined in Section 83(2) of the C-GST Act.

In a legal context, the learned counsel argues that a certain order, dated 04.11.2019, has lost its effect as one year has passed since its issuance, expiring on 04.11.2020, according to the provisions of subsection (2) of Section 83 of the Central Goods and Services Tax (C-GST) Act. Notably, Section 89 of the C-GST Act, titled ‘Liability of directors of private company,’ stipulates the attachment of directors’ property when the company they direct is under assessment. This information is highlighted for factual completeness.

The court in question has determined that there is sufficient evidence to establish a prima facie case. However, rather than prolonging the process by issuing a Rule Nisi, the court has decided to expedite proceedings. Consequently, Mr. Sai Srujan Tayi, a seasoned senior standing counsel for GST, with assistance from Ms. Sonu Mehtha, has been permitted to accept notice on behalf of respondents 1 to 4. Additionally, Mr. S. Ravikumar, a learned Special Government Pleader, has accepted notice for the fifth respondent. This decision reflects the court’s aim to streamline the legal process while ensuring that all parties are duly notified and represented.

In a recent court session, the learned Revenue counsel requested a brief adjournment to obtain instructions and respond accordingly. This request was granted by the court. Additionally, it was directed that the name of the learned Revenue counsel be included in the cause list for the upcoming listing on December 15, 2022.

During the current session, Mr. K. Anandharaja, representing M/s. Murali Law Firm, appeared as the counsel for the sole writ petitioner, Mr. Sai Srujan Tayi. Learned Revenue counsel represented respondents 1 to 4, and Mr. S. Ravikumar, acting as the State counsel (Special Government Pleader), represented the 5th respondent, who was noted as a formal party in these proceedings.

Referring to the previous session held on December 8, 2022, the learned Revenue counsel informed the court that the Section 74 proceedings had concluded with an order dated May 19, 2022. The writ petitioner has subsequently filed an appeal, specifically a statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 (referred to as the ‘C-GST Act’ for convenience). However, counsel for the writ petitioner contested this submission, initiating a dispute.

The matter at hand revolves around the question of whether a provisional attachment order has ceased to be valid after one year from its issuance. The order in question was dated 04.11.2019, and one year had passed from that date on 04.11.2020. There is no dispute regarding this timeline.

According to sub-section (2) of Section 83 of the Central Goods and Services Tax (C-GST) Act, the provisional attachment ceases to have effect after one year from the date of the order. Therefore, by the operation of this law, the provisional attachment that is being challenged in the present writ petition is no longer valid.

In essence, the impugned order has already lost its legal effect due to the passage of time as mandated by the statute. Thus, granting the relief sought in the writ petition would simply affirm the legal consequence already dictated by the operation of the law. Therefore, engaging in further dispute or contestation over this matter may not be necessary given the clear statutory provision and its application to the situation at hand.

In a lengthy summary, it appears that the court is addressing a writ petition and associated proceedings. The court reiterates a position and emphasizes that the order in question ceased to have effect as of November 4, 2020. This clarification serves as a response to the writ petition. Additionally, the court states that its decision regarding the writ petition will not hinder nor accelerate any Section 74 proceedings.

The writ petition in question is then closed based on the terms mentioned above. Consequently, any associated Writ Miscellaneous Petition (WMP) is also closed. The court concludes by stating that no costs are awarded in this matter.

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