The Parliament had intended the GST to be a citizen-friendly tax structure…: Supreme Court

The Parliament had intended the GST to be a citizen-friendly tax structure... Supreme Court
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New Delhi: The Supreme Court on Wednesday said the taxman could not see all businesses as fraudulent, as it made sharp observations against how tax authorities implemented goods and Services Tax.

A bench comprising Justices D.Y. Chandrachud and M.R. Shah said: “The Parliament had intended the GST to be a citizen-friendly tax structure… the purpose of the Act is lost in the manner in which it is enforced in our country.”

The observations were made during the hearing of a plea challenging powers of provisional attachment under the Himachal Pradesh GST Act, filed by Radha Krishna Industries, represented by senior advocate Puneet Bali advocate Surjeet Bhadu. The bench noted that tax authorities could not be attaching assets. It cannot be a pre-emptive strike as it is termed provisional attachment draconian.

The company submitted before the bench that the power of attachment under Section 83 is draconian.

According to this section, during the tax proceedings’ pendency, the department can attach any property (including bank accounts and accounts receivable) as a provisional attachment. The tax officers use it as a measure to guarantee the satisfaction of the last judgment by the courts.

The bench observed that a balance must be maintained between protecting the interests of revenue and protecting genuine businesses. “The country needs to come out of this tax culture that all businesses are fraudulent… even when Rs 12 crore tax has been paid, just because some tax is still due, you cannot start attaching property,” it said.

It emphasised that tax officers raise enormous demands from businesses with no accountability. The bench said tax officers raised enormous demands after assessment and cited that if Rs 10,000 crore has been reduced to Rs 1,000 crore by the appellate tribunal or the top court, it must reflect the tax evaluation officer.

The bench stressed that law needs to be structured, and the tax authorities have to abide by the mandate of law. After the parties concluded their arguments, the bench reserved the verdict.

In January this year, the Himachal Pradesh High Court dismissed the plea seeking quashing of the provisional attachment under Section 83.

Written by Ritik Gupta

His name is Ritik Gupta; currently pursuing law. He has always kept pride as his everything. He deems writing as not like any other hobby but a reflection of one’s intellectuality. He likes to research on the parasitic problems and then lay them down in such a means that can be of assistance to the society. He just not studies law but treats it a controversial weapon to defeat the wrong.

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