2023 (1) TMI 235 - HC - GST

Provisional attachment of goods - whether the provisional attachment has ceased as one year from the date of the order had elapsed? - HELD THAT - There is no disputation or contestation that the provisional attachment is dated 04.11.2019 and one year therefrom elapsed on 04.11.2020. Therefore by operation of law i.e., sub-section (2) of Section 83 of C-GST Act, provisional attachment which has been assailed in the captioned writ petition has ceased to have effect. Therefore the impugned order which has been assailed has already perished by operation of Statute. This means that acceding to the prayer in captioned writ petition is only stating the obvious i.e., stating the obtaining legal consequence of operation of Statute. This position is reiterated and it is made clear that the impugned order has ceased to have effect on and from 04.11.2020 - Petition disposed off.

Summary

Issues:
1. Provisional attachment of immovable property under Rule 159 of the Central Goods and Services Tax Rules, 2017.
2. Interpretation of Section 83(2) of the Central Goods and Services Tax Act, 2017 regarding the duration of provisional attachment.
3. Liability of directors of a private company under Section 89 of the CGST Act.

Analysis:
1. The judgment dealt with the provisional attachment of immovable property of two directors of a company under Rule 159 of the Central Goods and Services Tax Rules, 2017. The petitioner challenged the provisional attachment order dated 04.11.2019, alleging wrongful availing of Input Tax Credit under Section 74 of the CGST Act. The petitioner argued that as per Section 83(2) of the CGST Act, the provisional attachment ceases to have effect after one year from the date of the order. The court found a prima facie case and allowed notice to be accepted by the respondents' counsels for further instructions.

2. The interpretation of Section 83(2) of the CGST Act was crucial in this judgment. The court noted that the provisional attachment order dated 04.11.2019 ceased to have effect on 04.11.2020, as one year had elapsed, as per the statutory provision. The court emphasized that the impugned order had already perished by the operation of law. The judgment clarified that the provisional attachment had ceased to have effect, rendering the impugned order ineffective from 04.11.2020 onwards. The court highlighted that the decision on the provisional attachment did not impede or influence any separate Section 74 proceedings.

3. Additionally, the judgment briefly mentioned the liability of directors of a private company under Section 89 of the CGST Act, stating that the provision allows for the attachment of property of directors when the company is an assessee. However, this aspect was noted for factual completeness and did not form a significant part of the decision. Ultimately, the court disposed of the writ petition and the accompanying miscellaneous petition, stating that the impugned order had ceased to have effect from 04.11.2020, and there would be no order as to costs in this matter.