TMI Blog2021 (9) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Authority to have considered the representation of the petitioner under Rule 159(5) of the CGST Rules. - However, as the period of one year would come to an end on 21.09.2021, it would be travesty of justice, if the matter is remanded back keeping the option open for the respondent Authority to pass orders on the representation of the petitioner, which theoretically would entitle the respondent, if circumstances are so made out to reject lifting of such attachment. Admittedly, no proceedings have been initiated under Section 74 of CGST Act as against the petitioner till date. What must also be noticed is that though the statement of objections of the respondent Authority seeks to make out a case that the proceedings under Section 74 of CGST Act are sought to be instituted and in the context of which the provisional attachment under Section 83 of CGST Act is resorted to, the impending proceedings under Section 74 of the CGST Act cannot be a ground to exercise power under Section 83 for the provisional attachment. If the only ground made out in the statement objections and the very order of attachment at Annexure-A is the proceedings under Section 74 of the CGST Act, even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly in exercise of power under Section 83 of the Central Goods and Services Tax Act, 2017 ('CGST Act' for brevity). 5. Learned counsel for the petitioner submits that the said factum of provisional attachment of the bank account was learnt by the petitioner only from their banker. It is further submitted that the necessary representation came to be made by the petitioner in terms of Rule 159(5) of the Central Goods and Services Tax Rules, 2017 ('CGST Rules' for brevity) seeking release of attachment and defreezing of bank accounts, but such request was neither considered nor any order was passed as required under the applicable Rules. 6. The respondents have filed their statement of objections and have contended that in the course of investigation relating to massive GST evasion on the basis of fake invoices as the petitioner was conducting business with several fake Firms and had availed fraudulent Input Tax credit, the petitioner's premises was searched on 02.09.2020 and the statement of Directors of the petitioner's Company were recorded. 7. It is further asserted that Mr.Rishi Raj Singh Rathore had represented that he would abide by the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for an opportunity that a person whose property is attached is permitted to file objections to make out a case that the property attached was not liable for attachment and after affording an opportunity of being heard to the affected person, there could be an order of release of the said property by an order in Form GST DRC-23. 13. It is contended that such procedure as provided under Rule 159 of CGST Rules ought to have been strictly adhered to, as the order of provisional attachment has serious economic consequence on the petitioner and there has been a total non-compliance of the procedure prescribed under Section 159 of CGST Rules insofar as there was no notice of attachment as contemplated under Rule 159(2) of CGST Rules. 14. It is submitted that an essential requirement for exercise of power under Section 83 of CGST Act would be the formation of an opinion by the Commissioner that such provisional attachment is required to protect the interests of Government Revenue only and the material supporting such formation of opinion is not forthcoming in the present case and accordingly, the order of attachment is liable to be set aside. It is further contended that the represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , nor any material has been produced to indicate that such notice has been served on the petitioner. 21. What is of significance is the opportunity to be afforded to the affected person under Rule 159(5) of CGST Rules which provides that a person whose property is attached may, within seven days of the attachment under Sub-Rule (1), file objections to the effect that the property attached was or is not liable for attachment, and the Commissioner may, after affording an opportunity of being heard to the person permitting him to file objections, may pass an order releasing the property in Form GST DRC-23. 22. As pointed out by the Apex Court at para-57 of its judgment in the case of Radha Krishan Industries (supra) Sub-Rule (5) of Rule 159 of CGST Rules provides a right of post-provisional attachment consisting of right of (1) submitting an objection to the attachment (2) an opportunity of being heard. 23. Obviously, the right contemplated under Rule 159(5) of CGST Rules would require that the order of provisional attachment has to be communicated to the petitioner, without which, the question of exercising right seeking for lifting of the provisional attachment as contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under Rule 159(5) of the CGST Rules. Though learned counsel for the respondent Authority would submit that even if the procedural lapse as pointed out by the petitioner were to be accepted, the matter requires to be remanded for fresh consideration of the representation of petitioner dated 13.10.2020 as per law. What requires to be noticed is that the order of attachment is dated 21.09.2020. Section 83(2) of the CGST Act provides that every provisional attachment shall cease to have the effect after expiry of one year from the date of the order made under Sub-Section (1) of Section 83 of CGST Act. As the period of one year would come to an end on 21.09.2021, it would be travesty of justice, if the matter is remanded back keeping the option open for the respondent Authority to pass orders on the representation of the petitioner, which theoretically would entitle the respondent, if circumstances are so made out to reject lifting of such attachment. Much water has flown in terms of lapse of time from the date of passing of the order of provisional attachment till this day, i.e. the date of this order. Even otherwise, merits of the matter being dealt with, does not warrant any such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 74 cannot be upheld. The respondent Authority cannot be permitted to contend that any other proceedings contemplated under Section 83 of CGST Act have been initiated, as it is made out in the provisional order of attachment enclosed at Annexure-A that proceedings have been initiated under Section 74 of the CGST Act. Any exercise of power as may be permitted statutorily which has an adverse consequence on the petitioner, would have to be strictly construed. 32. Insofar as the contention of learned counsel for the Revenue that reasonable belief under Section 83 of CGST Act can be stated to have been fulfilled in light of the non-adherence to the statement stated to have been made before the Authorities committing to reverse the Input Tax Credit and pay the amount cannot be accepted, as opinion of the Commissioner as contemplated under Section 83 of CGST Act is that the provisional attachment of property, including the bank account is necessary for protecting the interests of Government Revenue. Such opinion must be reflected in some proceedings, which proceedings are also not placed before this Court. 33. In light of wide discretion granted to the Commissioner for formation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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