2022 (4) TMI 1195 - HC - GST

Provisional attachment of property - proceedings under Section 62 or Section 63 or Section 64 or Section 73 or Section 74 of the Act were pending at the time of issuance of the notice or not - Section 83 of the Central and Service Tax Act, 2017 - HELD THAT - It has been held by the Writ Court that no documentary evidence has been placed on record by the Revenue to show that the proceedings were initiated under Section 74 of the Act so as to pass the order under Section 83 of the Act. It is trite that when the Act specifically provides the requirements for invoking Section 83, it has to be strictly adhered to. Merely referring to the letter which indeed does not refer to section 74, it cannot be presumed that such proceedings under Section 74 of the Act were pending to initiate proceedings under Section 83 of the Act. Inference that could be drawn from the material available on record cannot be stretched to consider any letter issued requesting the assessee to pay the bills to be the compliance of Section 83 of the Act. In other words, compliance of the necessary ingredients/conditions is sine qua non and it has to be done in letter and spirit not in a cryptic and cavalier manner - It is significant to note that every such provisional attachment shall ceased to have effect after the expiry period of one year from the date of the order under Sub-section (1) of Section 83 In the circumstances, learned Single Judge ought to have quashed Annexure-L the provisional attachment notice dated 30.03.2019 not Annexures- D and E the same is clarified. Annexure-L dated 30.03.2019 is set aside. There are no reasons to interfere with the well-reasoned order of the learned Single Judge. Resultantly, writ appeal stands dismissed.

Summary

Issues:
1. Interpretation of Section 83 of the Central and Service Tax Act, 2017.
2. Validity of the provisional attachment notice dated 30.03.2019 issued by the Revenue.
3. Examination of the proceedings initiated under Section 83 vis-à-vis the provisions of the Act.
4. Compliance with the requirements of Section 83 for invoking provisional attachment.

Analysis:
1. The appeal challenged the order allowing a writ petition that set aside Annexures-D and E dated 27.08.2018 and 17.10.2018 issued by the Commissioner of Central Tax. The dispute revolved around the invocation of Section 83 of the Act through a provisional attachment notice. The Single Judge concluded that the requirements of Section 83 were not satisfied, leading to the appeal by the Revenue.

2. The Revenue contended that the letters issued under Section 74 of the Act were misinterpreted by the Single Judge. They argued that the respondent failed to pay GST despite issuing invoices, justifying the initiation of proceedings under Section 74. However, the respondent maintained that Section 83 was wrongly invoked as the conditions were not met. The Single Judge's decision was upheld, emphasizing strict adherence to statutory requirements.

3. The Court analyzed Annexures-D and E to determine the validity of invoking Section 83. It was held that these documents did not conclusively establish pending proceedings under Section 74. The importance of fulfilling statutory conditions for invoking Section 83 was emphasized, highlighting the necessity for clear evidence and proper compliance.

4. The judgment clarified that the provisional attachment notice dated 30.03.2019 was set aside, emphasizing the strict adherence to statutory provisions. The Court dismissed the appeal, stating that subsequent events would not impact the decision. The Revenue was allowed to take appropriate action within the legal framework, ensuring the observations made did not affect pending proceedings.

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed, the arguments presented by both parties, and the Court's reasoning leading to the final decision.