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TMI Blog2022 (8) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in manufacturing of plastic granules and its compounding. 4. Earlier, Bank account of the petitioner was attached under Section 83 of The Central Goods & Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act, 2017') by order dated 22.10.2021, passed by the respondent no.2, against which the petitioner filed Writ Tax No. 448 of 2022 (Varun Gupta Versus Union of India and another) and the writ petition was allowed by order dated 11.05.2022 on the ground that no proceeding under Section 74 of CGST was pending as on the date of attachment. It was further observed that amended provisions of Section 83 of the CGST Act were not available when the attachment order was passed. 5. Consequently, the respondent no.2 has passed the order dated 18.05.2022 intimating the Bank that the attachment has been quashed but on the very next day, the respondent no.2 has passed the impugned order dated 19.05.2022, which is reproduced below:- "To The Branch Manager AXIS Bank, D-46, RDC, Raj Nagar, Ghaziabad Provisional attachment of property under section 83 of CGST Act, 2017 It is to inform that M/s S.G. Industries (proprietor Sh. Varun Gupta) having principal place of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the government revenue. The power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account. The attachment is provisional and the statute has contemplated an attachment during the pendency of the proceedings under the stipulated statutory provisions noticed earlier. An attachment which is contemplated in Section 83 is, in other words, at a stage which is anterior to the finalization of an assessment or the raising of a demand. Conscious as the legislature was of the draconian nature of the power and the serious consequences which emanate from the attachment of any property including a bank account of the taxable person, it conditioned the exercise of the power by employing specific statutory language which conditions the exercise of the power. The language of the statute indicates first, the necessity of the formation of opinion by the Commissioner; second, the formation of opinion before ordering a provisional attachment; third the existence of opinion that it is necessary so to do for the purpose of protecting the interest of the government revenue; fourth, the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid formation of the opinion that a provisional attachment is necessary for the purpose of protecting the interest of the government revenue. 52 We adopt the test of the existence of "tangible material". In this context, reference may be made to the decision of this Court in the Commissioner of Income Tax v Kelvinator of India Limited38. Mr Justice SH Kapadia (as the learned Chief Justice then was) while considering the expression "reason to believe" in Section 147 of the Income Tax Act 1961 that income chargeable to tax has escaped assessment inter alia by the omission or failure of the assessee to disclose fully and truly all material facts necessary for the assessment of that year, held that the power to reopen an assessment must be conditioned on the existence of "tangible material" and that "reasons must have a live link with the formation of the belief". This principle was followed subsequently in a two judge Bench decision in Income Tax Officer, Ward No. 162 (2) v Techspan India Private Limited39. While adverting to these decisions we have noticed that Section 83 of the HPGST Act uses the expression "opinion" as distinguished from "reasons to believe". However for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or any person specified in sub-section (1A) of section 122, 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)." 9. In Section 83 of the CGST Act, following expressions have been used : (i) Commissioner is of the opinion (ii) that for the purpose of protecting the interest of the Government revenue (iii) it is necessary so to do (iv) by order in writing, attach provisionally (v) in such manner as may be prescribed. 10. Chapter XII of the CGST Act contains Sections 59 to 64 providing for assessment. Chapter XIV contains Sections 67 to 72 providing for inspection, search, seizure and arrest. Chapter XV contains Sections 73 to 84 providing for demands and recovery. 11. Plane reading of Section 83 of the CGST Act leaves no manner of doubt that firstly, there is necessity of the formation of opinion by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid judgment in the case of Radha Krishan Industries (supra), Hon'ble Supreme Court reproduced the order under Section 83 of the Act dated 28.10.2020, as under : "In order to protect the interests of revenue and in exercise of the powers conferred/delegated by Commissioner of the State Taxes & Excise, HP vide office order No.12-4/78-EXN-Tax-Part-278/22(a)- 26780-82 dated 21.10.2020 under section 83 of the Act, I, U.S. Rana, Joint Commissioner of State Taxes & Excise, South Enforcement Zone, Parwanoo, hereby provisionally attach the payment to the extent of Rs.5,03,82,554/- of M/s Radha Krishan Industries, Kala-Amb. Henceforth, no payment shall be allowed to be made from your company to M/s RadhaKrishan Industries without the prior permission of this department / office." 13. The order impugned in the present writ petition is almost similar to the order which was impugned before the Hon'ble Supreme Court in the case of Radha Krishan Industries (supra) which has been quashed by Hon'ble Supreme Court with observations aforequoted. 14. Facts of the present case clearly reveals that no proceedings under Section 74 of the C.G.S.T. Act has yet been initiated. That apart the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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