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2022 (1) TMI 438 - HC - GSTProvisional attachment of a cash credit account - Section 83 of the CGST Act 2017 - HELD THAT - Prima facie The Principal Commissioner CGST Surat is in contempt. He owes an explanation as to on what basis he has distinguished all the orders passed by this Court over a period of time taking the view that a cash credit account could not be provisionally attached in exercise of powers under Section 83 of the Act 2017. Let Notice be issued to the respondents returnable on 12.01.2022. Mr. Utkarsh Sharma the learned Standing Counsel appearing for the department waives service of notice for and on behalf of the respondents Nos.1 and 2.
Issues:
Challenge to order of provisional attachment of cash credit account under Section 83 of the CGST Act, 2017. Analysis: 1. The High Court heard the counsel for the writ applicant challenging the provisional attachment of a cash credit account maintained with Axis Bank. The impugned order was passed under Section 83 of the CGST Act, 2017. The Court referred to a previous case where it was held that a cash credit account cannot be provisionally attached. 2. The Court noted that the cash credit account in question was used by the applicant to borrow money for business purposes, establishing a borrower-lender relationship with the Bank. Previous judgments have consistently condemned the provisional attachment of cash credit accounts under Section 83 of the Act. 3. The Principal Commissioner, CGST, Surat overlooked the established legal position and attempted to distinguish previous judgments by arguing that the attachment was done by a different authority in those cases. The Court found this reasoning unsatisfactory and indicated that the Commissioner may be in contempt for ignoring the settled law. 4. The Court directed the issuance of notices to the respondents and permitted direct service to Axis Bank. The Principal Commissioner was required to provide an explanation for the impugned order on the next hearing date. The Court expressed its intention to address the Commissioner's actions in detail during the upcoming proceedings.
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