Goods, Demat and Current A/C necessary for business can’t be provisionally attached: HC

Case Details: Arya Metacast (P.) Ltd. v. State of Gujarat - [2022] 137 taxmann.com 173 (Gujarat)

Judiciary and Counsel Details

• • J.P. Pardiwala and Ms. Nisha M. Thakore, JJ.
  • Uchit N. Sheth for the Petitioner. 
  • Utkarsh Sharma for the Respondent.

Facts of the Case

The search was conducted by the department in the premises of petitioner. The order of provisional attachment of various properties, demat accounts, current account, stock of goods etc. was passed after conducting search on the ground that petitioner was engaged in bogus billing by entering into purchase transactions with 15 fictitious firms. It filed writ petition challenging the order the provisional attachment.

High Court Held

The Honorable High Court observed that the action of provisional attachment should not hamper normal business activities. However, in the instant case, the departmental authority not only attached stock of goods but also demat and current accounts which would be valuable assets necessary for running of the business. Therefore, the impugned order of provisional attachment qua stock of goods, two demat accounts as well as current account was liable to be quashed and set aside. Also, the mobile phone and laptop were directed to be released subject to undertaking that they would be retained in original form.