2020 (9) TMI 781 - HC - GST

Provisional attachment order - no proceeding pending under Sections 62, 63, 64, 67, 73 and 74 of CGST Act - exercise of power under Section 83 of CGST Act - HELD THAT - This Court is of the view that Rule 159(5) of the Central Goods and Services Tax Rules, 2017 is squarely applicable to the facts of the present case - the rule states that Any person whose property is attached may, within seven days of the attachment under sub-rule (1), file an objection to the effect that the property attached was or is not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC-23 . It is deemed appropriate to direct the respondent No.1 to treat the present writ petition as an objection under Rule 159(5) of the Central Goods and Services Tax Rules, 2017 and decide the same within a week by way of a reasoned order after giving an opportunity of hearing to the petitioner - petition disposed off.

Summary

Issues:
Challenge to provisional attachment order under Section 83 of CGST Act based on absence of pending proceedings under specific sections of CGST Act.

Analysis:
The petition challenged a provisional attachment order issued by respondent No.1 to the petitioner's bankers. The petitioner argued that the conditions for exercising power under Section 83 of the CGST Act were not met as there were no pending proceedings under Sections 62, 63, 64, 67, 73, and 74 of the CGST Act. The Court noted that Rule 159(5) of the Central Goods and Services Tax Rules, 2017 was relevant to the case. This rule allows a person whose property is attached to file an objection within seven days of the attachment, stating that the property is not liable to attachment. The Court referred to a judgment by the High Court of Gujarat, emphasizing the importance of following the procedure outlined in Rule 159(5) before seeking relief through Article 226 of the Constitution of India.

The High Court of Gujarat judgment highlighted that the petitioners had an alternative remedy available under Rule 159(5) of the CGST Rules to file objections against the attachment within seven days. The Court dismissed the petitions as not entertained due to the availability of this efficacious alternative remedy. It directed the petitioners to file objections by a specified date and instructed the competent authority to consider these objections, including those related to the legality of the attachment. The judgment stressed the importance of following the prescribed procedure and utilizing available remedies before approaching the court under Article 226 of the Constitution of India.

In line with the above cases and recognizing similar circumstances, the High Court directed respondent No.1 to treat the present writ petition as an objection under Rule 159(5) of the CGST Rules. The respondent was instructed to decide on the petition within a week after providing an opportunity for a hearing to the petitioner. The Court also addressed the issue of incomplete service of annexures to the respondent's counsel, directing the petitioner's counsel to provide the necessary documents promptly. With these directions, the present writ petition was disposed of, and the order was to be uploaded on the website and forwarded to the respective counsels via email.