2019 (10) TMI 156 - HC - GST

Release of attached Bank Accounts as well as godown/office and blocking of credit - section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - Section 83 of the CGST Act empowers provisional attachment of property, subject to pendency of the proceedings under sections 62, 63, 64, 67, 73 or 74 of the CGST Act. The same does not contemplate, and rightfully so, provisional attachment pending any proceeding under section 83 of the CGST Act, inasmuch as, there can never be any proceeding pending under section 83 of the CGST Act as the same only empowers the State authorities to provisionally attach the property of a taxable person, subject to the provisions of section 83 being satisfied - It appears that the exercise of powers under section 83 of the CGST Act, whereby the bank account of the petitioner has been attached is totally without any authority of law. Blocking of the credit of ₹ 6,63,51,380/- available in the electronic credit ledger of the petitioner - HELD THAT - The learned Assistant Government Pleader even with the assistance of the instructing officer is not in a position to point out any provision of law which empowers the respondent authorities to block the credit. Attachment of godown/office - HELD THAT - The learned Assistant Government Pleader has submitted that the respondents would open the seal. Having regard to the fact that the order of attachment of bank account is prima facie without authority of law, and the order of blocking of credit is not backed by any statutory provision, the respondents are directed to forthwith withdraw the attachment of the bank account of the petitioner with the IDBI Bank, Prahladnagar Branch and to unblock the credit of ₹ 6,63,51,380/- available in the electronic credit ledger forthwith. Stand over to 17th October, 2019.

Summary

Issues:
1. Direction to withdraw bank attachment under section 83 of the Central Goods and Services Tax Act, 2017.
2. Release of godown/office.
3. Unblock credit under section 83 of the Central Goods and Services Tax Act, 2017.

Analysis:

Bank Account Attachment:
The petitioner sought a direction to withdraw the bank attachment made on IDBI Bank Limited. The court noted that the order of attachment and blocking of credit were not provided to the petitioner. Upon examination of the original file, it was revealed that the order of attachment was issued by the Assistant Commissioner of State Tax under section 83 of the CGST Act. Section 83 empowers provisional attachment of property during specific proceedings under the Act. However, the court emphasized that section 83 does not allow attachment pending proceedings under the same section, as it only authorizes provisional attachment based on certain conditions being met. Consequently, the court found the attachment of the bank account without legal authority.

Blocking of Credit:
The respondent authorities had blocked credit worth &8377;6,63,51,380 in the petitioner's electronic credit ledger without citing any legal provision for such action. Despite assistance, the authorities could not identify any provision empowering them to block the credit. This lack of statutory backing rendered the blocking of credit unjustified.

Godown/Office Release:
Regarding the attachment of the godown/office, the Assistant Government Pleader assured the court that the seal would be removed, indicating a willingness to release the property.

Court's Direction:
Considering the absence of legal basis for the bank account attachment and credit blockage, the court directed the respondents to immediately withdraw the bank account attachment and unblock the credit amount in the electronic credit ledger. The order specified the release of the bank account with IDBI Bank and the credit amount without delay. The matter was adjourned to a later date for further proceedings, with direct service permitted on the same day.