2021 (8) TMI 776 - HC - GST

Provisional attachment of bank accounts - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - The impugned order was passed by the learned Single Judge on 24.3.2021. The provisional orders of attachment were issued on 15.7.2020. Having regard to the provisions of S.83(2), as brought to our notice by the learned counsel for the 1st respondent and the date of Ext.P6 order, apart from the decisions referred to by the learned Single Judge in the order under challenge, we are not persuaded to interfere in this intra court appeal. In view of the difficulties expressed by the appellant, we grant liberty to the respondents in the writ petition to move appropriate applications before the learned Single Judge, in accordance with law - Appeal disposed off.

Summary

Issues:
1. Challenge against interim order staying directions in a writ petition.
2. Interpretation of Section 83 of the Central Goods and Services Tax Act, 2017.
3. Validity of provisional attachment orders and subsequent restoration conditions.
4. Legal arguments presented by both parties.
5. Expiry of provisional attachment orders and its impact on the appeal decision.

Issue 1: Challenge against interim order staying directions in a writ petition
The appellant, the 1st respondent in the writ petition, appealed against the interim order dated 24.3.2021 by the learned Single Judge. The order stayed the directions in Clause 2(a) of Ext.P9, which required the writ petitioner to provide security in the form of a bank guarantee and an undertaking not to alienate fixed assets until the disposal of the writ petition.

Issue 2: Interpretation of Section 83 of the Central Goods and Services Tax Act, 2017
The appellant contended that the impugned order did not consider the purpose of Section 83 of the CGST Act and failed to appreciate the legality of the orders challenged in the writ petition. The writ petitioner had challenged the provisional attachment of bank accounts under Section 83 of the CGST Act, and the restoration of bank accounts was subject to conditions, including furnishing a bank guarantee.

Issue 3: Validity of provisional attachment orders and subsequent restoration conditions
The learned Single Judge stayed the direction to furnish security in the form of a bank guarantee and instead required the writ petitioner to provide an undertaking not to alienate fixed assets. The appellant argued that the provisional attachment orders had expired by operation of the statute and, therefore, there was no basis for grievance. However, the Court declined to interfere with the interim order based on the provisions of Section 83(2) and the date of the provisional attachment orders.

Issue 4: Legal arguments presented by both parties
During the proceedings, arguments were presented by Adv. Sreelal Warriar, the learned Senior Standing Counsel for the appellant, and Adv. M.P. Shameem Ahamed for the 1st respondent. The counsel for the 1st respondent highlighted Section 83(2) of the CGST Act, asserting that the provisional attachment orders had expired as per the statute.

Issue 5: Expiry of provisional attachment orders and its impact on the appeal decision
The Court noted that the provisional attachment orders were issued on 15.7.2020, and the impugned order was passed on 24.3.2021. Considering Section 83(2) and the date of the attachment orders, along with the decisions referenced by the Single Judge, the Court declined to intervene in the appeal. However, the respondents were given liberty to seek appropriate relief before the Single Judge regarding the interim order, if necessary. The writ appeal was disposed of with these observations.