M/S RADHA KRISHAN INDUSTRIES versus STATE OF HIMACHAL PRADESH & ORS.

Citation: [2021] 3 S.C.R. 406 · Decided: 20-04-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

Cited by 7 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 3 S.C.R.
M/S RADHA KRISHAN INDUSTRIES
v.
STATE OF HIMACHAL PRADESH & ORS.
(Civil Appeal No 1155 of 2021)
APRIL 20, 2021
[DR DHANANJAYA Y CHANDRACHUD AND
M R SHAH, JJ.]
Himachal Pradesh Goods and Service Tax Act, 2017: s. 83 –
Power of the Commissioner to order provisional attachment of the
property of the assessee – Interpretation of – On facts, case of GST
fraud initiated against appellant’s supplier – During the course of
proceedings, issuance of orders by the Joint Commissioner u/s 83
for provisional attachment of the appellant’s receivables from its
customers – Writ petition under/Art. 226 challenging orders of
provisional attachment – Dismissed by the High Court holding that
there was an alternative and efficacious remedy of an appeal u/s.
107 – On appeal, held: Joint Commissioner while ordering a
provisional attachment u/s. 83 was acting as a delegate of the
Commissioner in pursuance of the delegation effected u/s.5(3) and
an appeal against the order of provisional attachment was not
available u/s.107(1) – Thus, the writ petition before the High Court
challenging the order of provisional attachment was maintainable,
being the only remedy available – There was non-application of
mind by the Joint Commissioner to the provisions of s. 83, rendering
the provisional attachment illegal – There was a breach of the
mandatory requirement of r. 159(5), entitlement to submit objections
and an opportunity of being heard, and the Commissioner
misconstrued in holding that he had a discretion on whether or not
to grant an opportunity of being heard – Furthermore, there were
no pending proceedings against the appellant, the mere fact that
proceedings u/s. 74 had concluded against the supplier, would not
satisfy the requirements of s. 83 – Thus, the order of provisional
attachment was ultra vires s. 83 – Also the High Court did not consider
that both the earlier and the subsequent orders of provisional
attachment were on the same grounds, without there being any
change in the circumstances – Thus, the order passed by the High
[2021] 3 S.C.R. 406
406
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Court is set aside – Himachal Pradesh Goods and Service Tax Rules,
2017 – r.159.
s. 83 – Power to order provisional attachment of the property
of the taxable person – Exercise of – Held: Conditions prescribed
by the statute for a valid exercise of the power is to be strictly fulfilled
– Exercise of the power for ordering a provisional attachment must
be preceded by the formation of an opinion by the Commissioner
that it is necessary so to do for the purpose of protecting the interest
of the government revenue – Formation of an opinion by the
Commissioner must be based on tangible material.
Interpretation of statutes: Taxing statute – Interpretation of –
Held: Provision must be construed on its plain terms – Purpose
underlying the provision is to be seen – An interpretation which
effectuates the purpose must be preferred particularly when it is
supported by the plain meaning of the words used.
Constitution of India: Art. 226 – Writ jurisdiction – Principles
of law for entertaining writ petition under Art. 226 – Explained.
Allowing the appeal, the Court
HELD: 1.1 The Joint Commissioner while ordering a
provisional attachment under section 83 of the Himachal Pradesh
Goods and Service Tax Act, 2017 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).[Para 72][467-
D]
1.2 The writ petition before the High Court under Article
226 of the Constitution challenging the order of provisional
attachment was maintainable. The High Court erred in dismissing
the writ petition on the ground that it was not maintainable.[Para
72][467-E]
1.3 The power to order a provisional attachment of the
property of the taxable person including a bank account is
draconian in nature and the conditions which are prescribed by
the statute for a valid exercise of the power must be strictly
fulfilled.[Para 72][467-F-G]
1.4 The exercise of the power for ordering a provisional
attachment must be preceded by the formation of an opinion by
M/S RADHA KRISHAN INDUSTRIES v. STATE OF HIMACHAL
PRADESH & ORS.
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SUPREME COURT REPORTS
[2021] 3 S.C.R.
the Commissioner that it is necessary so to do for the purpose of
protecting the interest of the government revenue. Before
ordering a provisional att

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