TMI Blog2019 (12) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... s or books or things so long as may be necessary for any inquiry or proceedings under the Act. In the present case, search proceedings were conducted at the premises of the petitioners on 27.9.2018. Thereafter, there was a visit by the respondents on 1.4.2019 which led to the arrest of the second petitioner. Thereafter, no search has been conducted at the premises of the petitioners. The search proceedings have, therefore, ended. On a plain reading of section 83 of the GST Acts, it is clear that a sine qua non for exercise of powers thereunder is that proceedings should be pending under section 62 or section 63 or section 64 or section 67 or section 73 or section 74 of the GST Acts - In the present case, the proceedings under section 67 of the GST Acts are no longer pending and pursuant to the search, proceedings under any of the other sections mentioned in section 83 have not been initiated. Under the circumstances, on the date when the orders of provisional attachment came to be made, the basic requirement for exercise of powers under section 83 of the GST Acts was not satisfied. The provisional attachment of the bank accounts of the petitioners under section 83 of the GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was utilized towards payment of output tax liability and the differential tax amount was paid through electronic cash ledger. 4. On 27.9.2018, search proceedings came to be conducted by the Central Goods and Services Tax Department at the premises of the petitioners. An inquiry was made regarding the trading transactions of the petitioners and evidence was demanded regarding the purchase and sale transactions. The petitioners intimated that the goods were sold on as is where is basis and thus, there was no evidence of movement of goods; however, the fact is that the goods were purchased from registered vendors. It is further the case of the petitioners that it was not in dispute that the said vendors had deposited the tax amount into the Government treasury which was duly reflected in Form GSTR-2A on the online portal. According to the petitioners, it was also not disputed that the petitioners deposited the differential amount of tax into the Government treasury on further supply of such goods. 5. Subsequently, summonses were issued to the second petitioner in the months of October and November, 2018. The second petitioner duly attended to such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 1.4.2019 which led to the arrest of the second petitioner. Thereafter, there has been no search at the premises of the petitioners. Thus, no proceedings are pending under section 67 of the GST Acts. It was submitted that therefore, the action of provisionally attaching the bank accounts of the petitioners in purported exercise of powers under section 83 of the GST Acts despite the fact that on such date there was no pendency of search proceedings under section 67 of the GST Acts, is wholly without jurisdiction and illegal. 8.1 Next it was submitted that section 83 of the GST Acts is a drastic provision which can be invoked only if the authorities form an opinion that such attachment is necessary to protect the interest of the revenue. Reliance was placed upon the decision of this court in the case of Vishwanath Realtor Vs. State of Gujarat rendered on 29.4.2015 in Special Civil Application No.7210 of 2015, wherein the court has held that the formation of opinion is required to be made on the basis of tangible material on objective facts. The court further held that if on the basis of the past conduct of the dealer, the authorities believe that he would sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver received the goods mentioned therein and the first petitioner also issued invoices amounting to ₹ 88.94 crores to twenty seven firms without actual supply of the goods mentioned therein so as to enable the said twenty seven firms to avail illicit input tax credit without any physical movement of goods. 9.1 It was submitted that during the course of his statement on 30.11.2018, the petitioners had agreed to reverse the GST credit of ₹ 32.79 crores taken on the strength of invoices issued by M/s. Emmar Trading Private Limited and M/s. CKP Industries where they had received only invoices and no physical goods were received by them. However, the GST amount is still unpaid. 9.2 It was submitted that the act of the second petitioner has enabled twenty seven companies to avail illicit input tax credit without any movement of goods merely based upon invoices issued by him thereby causing loss to the Government revenue of ₹ 88.94 crores. It was submitted that this is a case where huge illicit input tax credit of ₹ 88.78 crores is availed of by the company and input tax credit of ₹ 88.94 crores has been illicitly passed on by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. (2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of provisional attachment have been made under section 83 of the GST Acts which reads as under:- 83 Provisional attachment to protect revenue in certain cases. - (1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1). 14. On a plain reading of section 83 of the GST Acts, it is clear that a sine qua non for exercise of powers thereunder is that proceedings should be pending under section 62 or section 63 or section 64 or section 67 or section 73 or section 74 of the GST Acts. In the present case, the proceedings under section 67 of the GST Acts are no longer pending and pursuant to the search, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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