ST - Provisional attachment of property - Careless exercise of power - HC allows WP with cost - Issues warning to Commissioner - Directs CBEC to issue Circular
CBEC issues the Circular:
In Kunj Power Projects vs UOI - , the Allahabad High Court imposed cost on the Department and instructed the Central Board of Excise & Customs to issue a circular to all the officers ensuring that the powers under Rule 3 should be exercised with utmost care and caution and should not be exercised frivolously.
The Board has obeyed and issued a Circular yesterday.
This is a case of an assessee whose bank accounts were ordered to be attached without giving any opportunity to them. The Allahabad High Court after a detailed analysis of the legal provisions, observed, inter-alia, that the order directing attachment of the property without waiting for a reply to the show cause notice, and without giving any opportunity and without giving any notice, was in gross violation of Rule 3 of the Rules of 2008 ( Provisional Attachment of Property Rules, 2008 ) read with paragraph 2 (iii) of the Circular dated 1st July, 2008. It was mandatory for the authority to issue a notice giving 15 days time to reply before attaching a property. The High Court further observed that since proceedings under Section 73 of the Act had been initiated and a show cause notice had already been issued to the petitioner, action for attachment could only have been initiated by the Commissioner and should not have been initiated by the Deputy Commissioner.
The Board Circular states:
1. On this issue, there are adequate safeguards in the law and same have been highlighted in the Circular dated 1.7.2008.
2. The present situation has resulted only on account of non-compliance with respect to both.
3. Chief Commissioners are requested to issue standing orders with respect to the observations of the Hon'ble Allahabad High Court and to also emphasize that non-compliance with legal provisions or administrative instructions will leave officers with no defence in legal proceedings arising out of such non-compliance.
The earlier Board Circular had emphasized that the provision for attaching a property provisionally is of an extraordinary nature and should be resorted to in the utmost circumspection and with maximum care and caution .
Obeying the Laws and Board Circulars is a rare trait among field officers.
Please also see 07 12 2015.
CBEC Circular No. 196/06/2016-SERVICE TAX., Dated July 27, 2016