2022 (1) TMI 698 - HC - GST

Lifting of provisional attachment levied by the Respondents on 11 October 2019 under Section 83(2) of the CGST Act - Period beyond one year - HELD THAT - The Hon ble Supreme Court in case of M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH ORS. 2021 (4) TMI 837 - SUPREME COURT has dealt with this issue in detail and has approved the decision taken by Gujarat High Court in case of VALERIUS INDUSTRIES VERSUS UNION OF INDIA 2019 (9) TMI 618 - GUJARAT HIGH COURT . It is held by the Hon ble Supreme Court that the power to order a provisional attachment is entrusted during pendency of the proceedings under any of the specified provisions under Sections 63, 64, 67, 73 or 74. It is when a proceeding under any of these provisions is pending that a provisional attachment can be ordered. It is held that under sub-section (2) of Section 83, a provisional attachment ceases to have effect upon the expiry of the period of one year of the order being passed under sub-section (1). The power to levy a provisional attachment has been entrusted to the Commissioner during the pendencdy of proceedings under Sections 62, 63, 64, 67, 73 or as the case may be, Section 74. The principles laid down in the case of Radha Krishan Industries apply to the facts of this court - the provisional attachment levied by the Respondents on 11 October 2019 under Section 83(2) of the said Act ceased to have effect on expiry of one year. Petition allowed.

Summary

Issues:
Challenge against provisional attachment of bank account under Section 83(2) of the Central Goods and Service Tax Act, 2017.

Analysis:
The petitioner, engaged in advertising and marketing, sought to set aside the provisional attachment of their bank account by the Assistant Commissioner (Anti-Evasion), Goods & Service Tax, Faridabad, Haryana. The petitioner's bank informed them of the freeze on 11 October 2019. The petitioner's GST registration was cancelled suo-moto by the GST, Mumbai Commissionerate from 14 December 2020. The petitioner argued that the provisional attachment, which expired on 10 October 2020, was still in effect. The counsel cited the case of Radha Krishan Industries Vs. State of Himachal Pradesh to support the contention that the attachment cannot continue beyond one year as per Section 83(2) of the Act.

The respondent, represented by counsel, did not dispute that the provisional attachment was made on 11 October 2019 under Section 83(2) of the Act. Referring to the judgment in Radha Krishan Industries, the court highlighted that provisional attachment power is available during proceedings under specified provisions like Sections 63, 64, 67, 73, or 74. The court noted that the attachment ceases after one year from the order under sub-section (1) of Section 83. The court acknowledged the decision in Valerius Industries Vs. Union of India and held that the principles from Radha Krishan Industries applied to the case, emphasizing that the power to order provisional attachment is entrusted during pending proceedings under relevant sections.

Consequently, the court found that the provisional attachment imposed on 11 October 2019 under Section 83(2) ceased to have effect after one year. As a result, the court allowed the writ petition, making the rule absolute, without any order as to costs, and directed the parties to act on an authenticated copy of the order.