A Division bench of the Hon’ble Supreme Court of India in Radha Krishan Industries v. State of Himachal Pradesh (Civil Appeal No. 1155 of 2021), while deciding whether the orders of provisional attachment issued by Joint Commissioner of State Taxes and Excise, Parwanoo against the appellant were in consonance with the conditions stipulated in Section 83 of the HPGST Act, held (on April 20, 2021) that the power to order for provisional attachment of the property of a taxable person (including bank accounts) is draconian in nature and hence, the conditions prescribed by the statute for valid exercise of this power must be strictly fulfilled. The SC further held that the Commissioner, before ordering a provisional attachment, must form an opinion, on the basis of tangible material, that the assessee is likely to defeat the demand and hence the interests of the government revenue cannot be protected without ordering a provisional attachment. On the preliminary issue of whether the Hon’ble HP HC was right in refusing to entertain the writ petition of the above-named appellant on ground of availability of alternative and efficacious remedy of appeal under Section 107 of the HPGST Act, the SC held that in view of the remedy of appeal being unavailable under Section 107(1), the writ petition before the HC challenging the order of provisional attachment was maintainable. Accordingly, the SC allowed the appeal and set aside the impugned judgment of HP HC as well as the orders of provisional attachment issued by Joint Commissioner of State Taxes and Excise, since there was a clear non-application of mind by the Joint Commissioner to the provisions of Section 83. This landmark judgment by the Hon’ble SC seeks to protect the legitimate concerns of citizens over arbitrary exercises of power, while ensuring that the legislative purpose in entrusting the authority to order a provisional attachment is fulfilled.
