HC Upheld Provisional Attachment of Movable and Immovable Properties to Protect Revenue Interest Due to Fraudulent ITC

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Provisional Attachment under GST

Case Details: Shree Dhanlaxmi Metal Industries vs. State of Gujarat - [2025] 173 taxmann.com 559 (Gujarat)

Judiciary and Counsel Details

  • Bhargav D. Karia & Niral R. Mehta, JJ.
  • Saurabh Soparkar, Sr. Adv. & Hardik V Vora for the Petitioner.
  • Ms Shrunjal Shah, AGP for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer under the CGST Act, was investigated for fraudulently availing ITC of ?76.68 crores through fake invoices without any actual supply of goods. Based on the investigation, the authorities formed the opinion that immovable properties alone would not be sufficient to secure the revenue, and therefore, issued provisional attachment orders under Section 83, attaching both movable and immovable properties. The petitioner challenged these orders before the Gujarat High Court, arguing that the attachment was unjustified, arbitrary, and lacked sufficient grounds, while also citing Radha Krishan Industries v. State of Himachal Pradesh [2021] 127 taxmann.com 26 (SC) as precedent.

High Court Held

The Hon’ble Gujarat High Court upheld the provisional attachment under Section 83, ruling that the authorities had validly formed an opinion based on tangible evidence, justifying the attachment of both movable and immovable assets. The Court affirmed that the case fell under the second instance of Circular No. 171/03/2022-GST, involving fraudulent ITC claims by the recipient. It also distinguished Radha Krishan Industries due to differing facts and found no evidence of harassment. The petition was dismissed in favour of the Revenue.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied