The Additional Director General, Directorate General of Goods and Services Tax Intelligence, Kolkata Zonal Unit VS M/s. Corandum Impex Pvt. Limited & Ors

The appeals in question arise from a collective order dated March 4, 2020, which was issued in response to a group of writ petitions. The lead case among these is WPA 18429 (W) of 2019. Initially, the appellant revenue had achieved success in front of the learned single Bench on a legal matter. However, the assessees have appealed this decision, and the current appeals are solely filed by the revenue against the part of the order that mandates the Department to pay costs amounting to Rs. 5,00,000/- to each of the three writ petitioners.

Upon reviewing the order issued by the learned single Bench, particularly focusing on paragraph 11, it is evident that the appellant/Revenue was reprimanded and financial penalties were imposed. The writ Court expressed disapproval of the authorities’ actions, deeming them illegal due to the continuation of provisional attachment from June 5, 2019, when the initial provisional attachment order expired, until October 2019, when a fresh order for provisional attachment was issued.

In its interpretation of Section 83(2) of the Act, the writ Court emphasized that provisional attachment should cease after one year. Consequently, the Court concluded that it is the responsibility of the authorities to either release the provisional attachment by informing the bank or by issuing a fresh order within the stipulated time frame.

The case revolves around appeals against a common order dated March 4, 2020, issued in a batch of writ petitions, with the lead matter being WPA 18429 (W) of 2019. The appellant revenue succeeded before the learned single Bench on a legal issue, prompting the assessees to appeal against the order in MAT 515 of 2020. The current appeals are filed by the revenue against the portion of the order directing the Department to pay costs of Rs.5,00,000/- to each of the three writ petitioners.

In examining the order of the learned single Bench, particularly paragraph 11, it was noted that the appellant/Revenue was reprimanded and costs were imposed. The court found the authorities’ action illegal for maintaining the provisional attachment continuously from June 5, 2019, when the first order of provisional attachment ceased, until October 2019, when a fresh order was issued. Section 83(2) of the Act was interpreted, stating that provisional attachment shall cease after one year, and thus, authorities must release the attachment or issue a fresh order if legally permissible. The court also addressed the legality of issuing subsequent provisional attachment orders, affirming that Section 83 empowers competent authorities to do so if necessary for revenue protection. It clarified that while the initial attachment ceases after one year, there’s no prohibition on issuing a fresh order if deemed necessary to protect revenue interests.

This finding was contested by the assessees, leading to individual appeals, with the central issue being whether the learned writ Court was justified in awarding costs of Rs.5,00,000/- to each assessee.

The intra-Court appeals in question stem from a collective order dated March 4, 2020, associated with a series of writ petitions, with WPA 18429 (W) of 2019 serving as the primary case. The appellant revenue initially prevailed on a legal issue before the single Bench, while the assessees lodged an appeal against that ruling. The present appeals, however, are solely brought by the revenue against the section of the order mandating the Department to pay Rs. 5,00,000/- as costs to each of the three writ petitioners.

The single Bench order, particularly paragraph 11, censured the appellant/Revenue and imposed costs. It deemed the authorities’ action unlawful for prolonging provisional attachment from June 5, 2019, when the initial attachment order expired, until October 2019, when a fresh one was issued. The Court interpreted Section 83(2) of the Act, stating that provisional attachment ceases after one year. Consequently, it held that authorities must release the attachment or issue a fresh order if legally permissible. Regarding the legality of subsequent attachment orders, the Court held that Section 83 empowers the competent authority to issue such orders if necessary to safeguard revenue interests. It emphasized that while the initial order expires after a year, nothing precludes issuing a fresh order thereafter if deemed necessary, thus ruling in favor of the Revenue.

This finding was contested by the assessees in individual appeals, yet the central issue revolves around whether the imposition of Rs. 5,00,000/- costs on each of them was justified. Given that the interpretation favored the Revenue and costs were imposed despite this, the imposition of such substantial costs appears unwarranted.

Counsel for the assessees argued that the Department’s conduct, particularly its persistence in maintaining the attachment order despite its legal expiration, justified the costs. However, the Court asserts that imposing costs on the department is within its discretion and hearing the concerned party is not mandatory. Moreover, as the appeals primarily challenge the cost imposition aspect of the common order, and given the legal intricacies involved, the Court deems it inappropriate to impose costs as directed by the single Bench.

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