2020 (9) TMI 879 - HC - GST

Attachment of property while exercising the power to access the premises u/s 71(1) - invocation of powers during pendency of proceedings - whether the impugned order of attachment of property under Section 83 of the Act could have been passed on the ground of proceedings instituted u/s 71(1) of the Act? HELD THAT - The plain reading of Section 83 of the Act would indicate that the powers can be invoked during the pendency of proceedings under Sections 62, 63, 64, 67, 73 and 74 of the Act - There is no power vested in the authorities to invoke the provisions of Section 83 during the pendency of the proceedings instituted under Section 71(1) of the Act. In fact, there cannot be any proceedings, which could be instituted under Section 71 of the Act - In such circumstances, the impugned order of attachment under Section 83 of the Act is hereby quashed and set aside. It is needless to clarify that the Appeal preferred by the writ-applicant against the final order of assessment shall be decided in accordance with law by the Appellate Authority - Application disposed off.

Summary

Issues:
1. Validity of order of provisional attachment of stock of goods and current account
2. Blocking of input tax credit
3. Jurisdiction to pass order of attachment under Section 83 of the Act

Analysis:
1. The writ applicant sought relief against the order of provisional attachment of stock of goods and current account, challenging the authority of Respondent No. 2 to pass such orders. The Court noted that the power to invoke Section 83 of the Act for attachment is limited to specific proceedings under Sections 62, 63, 64, 67, 73, or 74 of the Act. As the proceedings were initiated under Section 71(1) of the Act, the Court found the attachment without legal authority. The Court quashed and set aside the impugned orders of attachment.

2. The respondents had also blocked the input tax credit of the petitioner, which was challenged on the grounds of lack of statutory provision empowering such action. The Court observed that there was no provision in the State Goods and Services Tax Act or Central Goods and Services Tax Act allowing the blocking of input tax credit by the respondents. Consequently, the Court directed the immediate release of the blocked credit available in the electronic credit ledger.

3. The Court clarified that Section 71 of the Act relates to access to business premises and does not provide for the institution of proceedings. Therefore, the Court held that there could be no proceedings initiated under Section 71 of the Act. As a result, the order of attachment under Section 83 of the Act was deemed invalid and was quashed. The Court further directed that any appeal against the final assessment order should be decided by the Appellate Authority in accordance with the law. The writ application was disposed of accordingly, with direct service permitted.