2021 (4) TMI 85 - HC - GST

Provisional Attachment of Bank Accounts - Jurisdiction of Commissioner in the MGST Act - Section 83 of the MGST Act - HELD THAT - Since the power under section 83 is vested in the Commissioner, it is necessary to refer to the definition of Commissioner in the MGST Act. Section 2 (24) of the MGST Act defnes 'Commissioner' to mean the Commissioner of State Tax appointed under section 3 and includes the Principal Commissioner or Chief Commissioner of State Tax appointed under section 3. Though appointment of the Commissioner is made by the State Government under section 3, under sub-section (3) of section 5, the Commissioner may delegate his powers to any other ofcer who is subordinate to him, subject to such conditions and limitations as may be specifed by him. The search and resultant investigation was carried out in respect of M/s. Prarush Impex. Authorization under section 67 was given in respect of M/s. Prarush Impex, that too by an officer of the rank of Deputy Commissioner though as per section 67 such authorization should be by a proper ofcer not below the rank of Joint Commissioner There is no such authorization under section 67 of the MGST Act in respect of M/s. Praful Nanji Satra. Shri Praful Nanji Satra was summoned under section 70 of the MGST Act to tender evidence as a witness in connection with proceedings under section 67 of the MGST Act and section 64 of the Maharashtra Value Added Tax Act, 2002 in the case of M/s. Satra Retail Private Limited which prima-facie is a diferent business entity distinct from M/s. Praful Nanji Satra. Thus, it is evident that there was no proceeding against M/s. Praful Nanji Satra or against Shri Praful Nanji Satra under section 67 of the MGST Act. If that be so, then invocation of power under section 83 of the MGST Act against the petitioner would not be justified. Section 83 does not provide for such delegation or authorization. The opinion contemplated under section 83 of the MGST Act that to protect the interest of government revenue, it is necessary to provisionally attach any property including bank account has to be necessarily that of the Commissioner. No such opinion of the Commissioner is discernible from the record. Attachment of property including bank account of a person even if provisional is a serious intrusion into the private space of a person. Therefore, section 83 of the MGST Act has to be strictly interpreted - Since the impugned attachment of bank account has been found to be without jurisdiction, availability of alternative remedy in the form of fling objection under rule 159(5) of the MGST Rules would be no bar to the petitioner from seeking relief under writ jurisdiction. Even here also it is doubtful whether the Joint Commissioner to whom the representation dated 01.07.2020 was addressed could have at all exercised power under rule 159(5) of the MGST Rules when the authority to do so is the Commissioner. The impugned provisional attachment order cannot be sustained - Petition allowed.

Summary

Issues Involved:
1. Legality of the provisional attachment order dated 19.06.2020.
2. Jurisdiction and authority of the Joint Commissioner under Section 83 of the MGST Act.
3. Availability and sufficiency of alternative remedies under Rule 159(5) of the MGST Rules.

Detailed Analysis:

1. Legality of the Provisional Attachment Order:
The petitioner sought the quashing of a provisional attachment order dated 19.06.2020, which attached his bank account. The petitioner argued that no proceedings under Section 67 of the MGST Act were initiated against him, and thus, the provisional attachment was unjustified. The court examined the provisional attachment order and noted that it was issued under Section 83 of the MGST Act, which allows for the attachment of property during the pendency of certain proceedings. However, the court found no evidence of any proceedings under Section 67 against the petitioner. The search and investigation were conducted against M/s. Prarush Impex, with which the petitioner was not connected. Therefore, the invocation of Section 83 was deemed unjustified, and the provisional attachment was set aside.

2. Jurisdiction and Authority of the Joint Commissioner:
The court scrutinized whether the Joint Commissioner had the authority to issue the provisional attachment order. Section 83 of the MGST Act vests this power in the "Commissioner," defined under Section 2(24) of the MGST Act. The court found no authorization from the Commissioner delegating this power to the Joint Commissioner. Additionally, the opinion required under Section 83 to protect government revenue must be that of the Commissioner, which was absent in this case. The court concluded that the Joint Commissioner lacked jurisdiction to issue the provisional attachment order, further invalidating the attachment.

3. Availability and Sufficiency of Alternative Remedies:
The respondents argued that the petitioner had an alternative remedy under Rule 159(5) of the MGST Rules, which the petitioner had availed. The petitioner countered that even if his representation was considered an application under Rule 159(5), no hearing was granted, nor a decision taken. The court held that the availability of an alternative remedy does not bar the petitioner from seeking relief under writ jurisdiction, especially when the attachment was found to be without jurisdiction. Furthermore, it was doubtful whether the Joint Commissioner could exercise power under Rule 159(5) when the authority lies with the Commissioner.

Conclusion:
The court quashed the provisional attachment order dated 19.06.2020 and directed the respondents to withdraw the attachment of the petitioner's bank account. The writ petition was allowed, and the court emphasized that Section 83 must be strictly interpreted, given its serious intrusion into private property rights.