2022 (5) TMI 789 - HC - GST

Provisional Attachment of Bank Accounts of petitioner - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - A bare reading of Section 74 of the CGST Act, 2017, leaves no manner of doubt that proceedings under Section 74 of the CGST Act starts with issuance and service of notice upon the assessee. It has been admitted in the personal affidavit filed today by the respondent no.2 that no notice under Section 74 of the CGST Act has yet been issued. Thus, as on the date of attachment order dated 22.10.2021, there was no notice under Section 74 of the CGST Act. Consequently, the attachment order dated 22.10.2021 itself was without jurisdiction and consequently, it is not sustainable. In the personal affidavit, dated 11.05.2022 filed today, the respondent No.2 has referred Section 115 of the Finance Act, 2021 (No.13 of the 2021) whereby Section 83 of the CGST Act has been amended. Section 1(2)(b) of the Finance Act, 2021 provides that Sections 108 to 123 shall come into force on such date as the Central Government may by Notification in the Official gazette appoint. Petition allowed.

Summary

Issues:
Challenge to provisional attachment of bank accounts under Section 83 of the CGST Act, 2017.

Analysis:
1. The petitioner sought a writ of certiorari to quash the order directing provisional attachment of bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017.

2. The relevant provisions of Section 83 of the CGST Act, 2017 and Rule 159 of the CG & ST Rules, 2017 were examined. The section allows provisional attachment of property, including bank accounts, to protect government revenue during specific proceedings.

3. The respondent confirmed that proceedings under Section 74 of the CGST Act were pending at the time of attachment. However, it was noted that no notice under Section 74 had been issued, rendering the attachment order without jurisdiction and unsustainable.

4. The respondent referred to an amendment to Section 83 through Section 115 of the Finance Act, 2021, which came into force from 01.01.2022. As the amendment was not in effect when the impugned attachment order was passed, it was deemed unavailable.

5. The Court held that since no notice under Section 74 had been issued at the time of attachment, the order lacked jurisdiction. Consequently, the writ petition was allowed, quashing the attachment order and granting respondents the liberty to proceed as per law.