2019 (10) TMI 204 - HC - GST

Provisional attachment of Bank Accounts - copy of order not served to petitioner - principles of natural justice - HELD THAT - On a plain reading of section 83 of the CGST/GGST Act, it is evident that the same contemplates provisional attachment of any property including bank account belonging to a person where during the pendency of any proceedings under sections 62, 63, 64, 67, 73 and 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary to do so. In the present case, the requirements of section 83 of the Act are clearly not made out inasmuch as the concerned officer was not authorized or empowered to provisionally attach the property of the petitioner under section 83 of the CGST Act in respect of the proceedings under section 71(1) of the said Act. The impugned action of the respondent of provisionally attaching the bank account of the petitioner is without authority of law - since the impugned order passed by the second respondent was totally without any authority of law, the petition is disposed of with costs of ₹ 10,000/-.

Summary

Issues:
Challenging the provisional attachment of a bank account under the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 without legal authority.

Analysis:
The petitioner challenged the order dated 19.09.2019, which provisionally attached their bank account without furnishing a copy of the order. The petitioner argued that the attachment was without legal authority as per section 83 of the CGST Act and GGST Act. The respondent lifted the attachment upon realizing the mistake, but the petitioner contended that the initial action was unlawful and had significant consequences on their reputation and economic standing.

The court noted that while the bank account attachment was released later, the initial order lacked legal authority. Section 83 of the CGST/GGST Act allows provisional attachment during specific proceedings to protect government revenue. However, in this case, the concerned officer was not authorized to attach the petitioner's property under section 83 for the proceedings initiated under section 71(1) of the Acts. The court emphasized that such actions must be carefully considered due to their serious civil consequences.

The court concluded that the respondent's action of attaching the bank account was without legal authority, even though the attachment was later lifted. The court disposed of the petition, noting that no further relief was necessary, but imposed costs on the petitioner. It was clarified that the State Government could recover the costs from the responsible officer to emphasize accountability for unauthorized actions.