2021 (12) TMI 418 - HC - GST

Attachment of Bank Accounts - Section 83 of the Goa Goods and Services Tax Act, 2017 - HELD THAT - Section 83 of the Goa GST Act would come into operation only if any proceedings are pending under Sections 62, 63 or 64 or Section 67 or section 73 or section 74. Admittedly, as noted above, there are no proceedings pending or initiated as against the petitioners under any of the provisions. Neither any show cause notice has been issued to any of the petitioners. It appears that the impugned order is passed only because the respondent No.1 has appointed an appropriate officer for determining the tax liability of the petitioners. Mere appointment of an appropriate officer for determining the tax liability will certainly not be a ground to initiate any action, like the present one i.e. of provisionally freezing the bank accounts of the petitioners under the Goa GST Act. The impugned order cannot be sustained - petition allowed.

Summary

Issues:
- Validity of the impugned order provisionally attaching bank accounts under Section 83 of the Goa Goods and Services Tax Act, 2017 without initiating proceedings or issuing show cause notices.

Analysis:
The petitioners sought substantive reliefs through writs of certiorari and mandamus to quash and set aside the impugned order dated 01.10.2021 and direct the Respondent No.1 to de-freeze the bank accounts provisionally attached. The Senior Counsel for the petitioners argued that the impugned order was illegal and beyond the authority's powers under Section 83 of the Goa GST Act. It was highlighted that no proceedings had been initiated against the petitioners, nor had any show cause notices been issued. The respondent-authority's action was deemed to be in clear contravention of the statutory provisions. The freezing of accounts was considered unjustified and contrary to the law, as it was based on a misunderstanding regarding a sister concern's tax default, not related to the petitioners.

The respondent No.1, through an affidavit, acknowledged that no proceedings had been initiated against the petitioners under the Goa GST Act, and no show cause notices had been issued. The Advocate General conceded this point, emphasizing the absence of any pending or initiated proceedings against the petitioners under relevant sections of the Act. It was noted that Section 83 of the Act could only be invoked if certain proceedings were pending, which was not the case here. The impugned order was seen as a result of the appointment of an officer to determine tax liability, which was insufficient grounds for freezing bank accounts under the Act.

In the final judgment, the Court concluded that the impugned order dated 1st October 2021 was unsustainable and, therefore, quashed and set aside. The petitions were allowed in terms of the prayer clauses seeking to invalidate the order and de-freeze the bank accounts. The Court made the rule absolute in the specified terms, disposing of the petitions accordingly.