TMI Blog2022 (8) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... te and live nexus to the purpose of protecting the interest of the government revenue. There must be a valid formation of the opinion that a provisional attachment is necessary for the purpose of protecting the interest of the government revenue. This necessarily requires existence of tangible material before the Commissioner so as to enable him to form his opinion for provisional attachment of the property of an assessee/person including bank account, which may indicates a live link to the necessity to order a provisional attachment to protect the interest of the Government Revenue. Each of the ingredients of Section 83 must be strictly applied and complied before a provisional attachment on the property of an assesses can be made. In the impugned provisional attachment order there is absence of the aforesaid ingredients of Section 83. Therefore, the impugned order having been passed by the respondent No.2 by arbitrarily exercising his power, can not be sustained. Therefore, it deserves to be quashed. 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 respondent No.2 while passing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 business at B-19, Roop Nagar Industrial Area, Loni, Ghaziabad bearing registration number as 09ANFPG 1119E1ZH and PAN ANFPG1119E is a registered taxable person under the Act. Proceedings have been launched against the aforesaid person under section 67 and Section 74 of the said Act to determine the tax or any other amount due from the said person. As per information available with the department, it has come to my notice that the said person has a bank account in your bank having account no.916010071529025. In or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 issuance of an order in writing for the attachment of any property of the taxable person; and fifth , the observance by the Commissioner of the provisions contained in the rules in regard to the manner of attachment. Each of these components of the statute are integral to a valid exercise of power. In other words, when the exercise of the power is challenged, the validity of its exercise will depend on a strict and punctilious observance of the statutory pre-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason 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 reasons that we have indicated earlier we are clearly of the view that the formation of the opinion must be based on tangible material which indicates a live link to the necessity to order a provisional attachment to protect the interest of the government revenue. 70 Ex facie, the above order passed by the Joint Commissioner does not indicate any basis for the formation of the opinion that the levy of a provisional attachment was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Commissioner; secondly , the opinion must be formed before ordering a provisional attachment; thirdly, the opinion must indicate that it is necessary so to do for the purpose of protecting the interest of the government revenue; fourthly , the order must be in writing for the attachment of any property of the taxable person; and fifthly , observance of the Rules by the Commissioner in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 respondent No.2 while passing the impugned order, has neither recorded his opinion nor referred to any tangible material which necessitated him to pass the impugned provisional attachment order so as to protect the interest of the Government revenue . The basic ingredients required for passing the impugned order under Section 83 of the CGST Act as also au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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