Home Case Index All Cases GST GST + HC GST - 2023 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 350 - GUJARAT HIGH COURTAttachment of Bank account of petitioner - attachment during the pendency of investigation - fresh order of extension beyond the period of one year - HELD THAT:- Section 83 provides that for the purpose of protecting the interest of government revenue, the provisional attachment of any property including bank account belonging to the taxable person as prescribed in this provision, is permissible. It is clear from the very provision of the act that during the pendency of any proceedings under Section 62, 63, 64, 67, 73, 74, the commissioner on a subjective satisfaction if finds it necessary for the purpose of protecting the interest of government revenue may, by an order, in writing attach provisionally any property which may include the bank account which should belong to the taxable person and this provisional attachment shall cease to have effect after expiry of period of one year from the date of order made under sub-section (1). Here, according to the respondent, the petitioner has admitted his tax liability and promised to pay, but, he has not paid the government dues and therefore, the respondent according to its affidavit-in-reply by way of abundant precaution for protecting the revenue’s interest has proceeded to attach and freeze the bank accounts on 27.02.2020 and 02.03.2020. According to the Respondent, more than Rs. 1,00,00,000 is available in the State Bank Accounts and the respondent department exercising the powers vested under Section 83(2) of the CGST Act after obtaining the approval of the competent authority has again sent the letter on 09.02.2021 to the banks directing them to freeze the facility of withdrawal of amount from these accounts for one more year in order to protect the government revenue. Entertainment of the challenge to the merit is not desirable at this juncture at all as appropriate Authority would determine that aspect and statutory remedies would also demand address to such core issue at the relevant point of time. Therefore, this Court has chosen not to enter into the details of business model as explained in the statement of the petitioner and whether the transaction in money amounts to service attracting taxability under the Statute, except for the limited purpose of examining the apt exercise of powers under Section 83 of the Act prior to the finalization of assessment and raising of demand. What has also been pressed into service before this Courtis the decision of the Apex Court in case of M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH & ORS. [2021 (4) TMI 837 - SUPREME COURT] where the Apex court has held that the nature of provisional attachment being a draconian power, exercised before finalization of assessment or raising of the demand, the same has to be exercised with due caution. It is provisional as an aid of something else and its purpose is to protect revenue. Its validity depends on strict observance of statutory preconditions. Formation of commissioner’s opinion must approximate and live nexus to protection of revenue interest and it is not left to unguided subjective discretion of the commissioner’s opinion which must be based on tangible material regarding statutory requirement. As per the decision of the Apex court that the Court shall need to examine whether the commissioner exercised the powers under Section 83 read with Rule 159 in accordance with law and the material fact for making determination needs to be kept in mind where this Court also needs to bear in mind the necessity of provisional attachment which implicates the doctrine of proportionality which mandates the existence of approximate or live link between the need for attachment and the purpose which it is intends to secure - The mandatory requirement of furnishing the opportunity to the person whose property is attached is in consonance with the principle of natural justice which ensures a fair procedure. Provisional attachment of bank account without passing any fresh order after expiry of statutory period that too without compliance of necessary formalities would not be endorseable. The attachment of the bank account after expiry of prescribed period without passing fresh orders would surely be illegal in violation of rights of Assessee for carrying on business under article 19 of the Constitution of India as was held by the Calcutta High Court in case of Amazonite Steel Private Limited vs. union of India [2020 (3) TMI 1179 - CALCUTTA HIGH COURT]. However, even after expiry of one-year period as prescribed under the law, it is incumbent upon the authorities to release the provisional attachment by informing the bank on issuance of a fresh order of provisional attachment since the very purpose for which this exercise of provisional attachment was done is not completed. Petition disposed off.
|