2024 (10) TMI 1034 - HC - GST

Provisional attachment of bank account maintained by it in exercise of powers conferred by Section 83 of the Central Goods and Services Tax Act, 2017 - wrongful availment of of Input Tax Credit - HELD THAT - Bearing in mind the nature of allegations which stand levelled against the petitioner and stand reflected in the impugned order, the end of justice would merit the petitioner being accorded the liberty to move and seek lifting of the provisional attachment in terms of Rule 159. The writ petition is disposed off by permitting the writ petitioner to move in terms of Rule 159 within a period of one week from today. Any application for revocation of provisional attachment so made may be examined and disposed of in accordance with law and preferably within a period two weeks therefrom.

Summary

Issues:
1. Challenge to the provisional attachment of bank account under Section 83 of the CGST Act.
2. Compliance with Rule 159 of the CGST Rules regarding objections and revocation of provisional attachment.

Analysis:

Issue 1: Challenge to Provisional Attachment
The writ petitioner challenged the provisional attachment of its bank account under Section 83 of the CGST Act. The petitioner argued that the order lacked justification and failed to demonstrate that the attachment was necessary to protect government revenue. Reference was made to the Supreme Court's principles emphasizing the need for sufficient material to justify such drastic actions. The court noted the allegations of suspicious payments and fraudulent ITC availing but highlighted the petitioner's right to object and seek revocation under Rule 159 of the CGST Rules.

Issue 2: Compliance with Rule 159 of the CGST Rules
Rule 159 of the CGST Rules provides a mechanism for filing objections and seeking revocation of a provisional attachment. The court acknowledged the petitioner's right to challenge the attachment and directed the petitioner to move for lifting the attachment within a week as per Rule 159. The court emphasized that any application for revocation should be examined and disposed of promptly, preferably within two weeks. Importantly, the court kept all rights and contentions of the parties open, indicating that the final decision on the matter was pending further proceedings in compliance with the law.

In conclusion, the High Court allowed the petitioner to seek revocation of the provisional attachment under Rule 159 of the CGST Rules. The judgment emphasized the importance of following due process and providing the petitioner with an opportunity to challenge the attachment. The court's decision ensured that the petitioner's rights were protected while maintaining the integrity of the legal procedures outlined in the CGST Act and Rules.