Gujarat High Court Grants Assessee Permission to Pay Tax Liability in Installments, Lifts Bank Account Attachment

The above order delivered by Justice NV Anjaria and Devan M Desai, came in response to a Special Civil Application, whereby the petitioner prayed before the court seeking permission to make payment towards the outstanding tax amount to the tune of Rs. 2,13,04,290/- in twelve equal installments.

Nirajkumar Nareshkumar Lakhyani, the Petitioner, engaged in the business of trading in metal scrape, holds a valid registration certificate under the Central Goods and Services Tax Act, 2017 and the Gujarat Goods Services and Tax Act, 2017.

The dispute arose when officers from the respondent's office visited Lakhyani's business premises on November 29, 2022, to inquire about certain purchases, only to find the premises closed. As a result, a summons was issued under section 70(1) of the Central Goods and Services Tax Act, 2017, and the Gujarat Goods and Services Tax Act, 2017. Subsequently, the authorities attached Lakhyani's bank account.

Dissatisfied with the decision, the petitioner approached the High Court, seeking to set aside the order passed by the Adjudicating Authority.

During the hearing, Advocate Vaibhavi K Parekh, representing the petitioner, submitted an undertaking filed by the petitioner. The undertaking stated that the State Tax Officer (3) Enforcement, Division 12 (respondent No.3), had provided an unsigned statement of disputed input tax credit in December 2022, indicating a total outstanding amount of Rs. 2,13,04,290/- (CGST: Rs. 1,06,52,145/- + SGST: Rs. 1,06,52,145/-).

Further, under an oath, the petitioner pledged to pay the liability of INR 2,13,04,290/- (CGST: Rs. 1,06,52,145/- + SGST: Rs. 1,06,52,145/-) in fifteen equal monthly installments starting from May 2023. The petitioner expressed their readiness and willingness to settle the demand of Input Tax Credit raised by the authorities, without prejudice to their rights and contentions in future adjudicatory proceedings.

“In view of the above position arising where the petitioner would be paying within span of 15 equal monthly installments the tax demanded, order dated 30.11.2022 provisionally attaching Current Bank Account No.045361900003074 of the petitioner held with the YES Bank Limited, is hereby set aside. As a consequence, the attachment of the abovementioned bank account shall be lifted forthwith,” the court said while allowing the petition.

“In future proceedings, if any, the rights and contentions of both the sides shall remain open,” the court concluded.

Case Title: Nirajkumar Nareshkumar Lakhyani (Pro. Of M/S Om Multitrade) Vs. State Of Gujarat [R/Special Civil Application No. 6777 Of 2023]

Case Citation: 2023 Livelaw (Guj) 115

Appearance: Mr Vinod N Tandon(10042) For The Petitioner(S) No. 1 Ms Vaibhavi K Parikh(3238) For The Petitioner(S) No. 1

For The Respondent(S) No. 2,3 Mr. Raj Tanna, Assistant Government Pleader/Pp For The Respondent(S) No. 1

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