2019 (2) TMI 1452 - HC - GST

Attachment of bank accounts - input tax credit - power of Commissioner to order provisional attachment - section 83 of the CGST Act - Held that - Under section 83 of the CGST Act, the Commissioner is empowered to order provisional attachment for the purpose of protecting the interest of the Government revenue. In the facts of the present case, while a liability of ₹ 14.62 crores had been estimated at the time when the order under section 83 of the CGST Act came to be passed, the present estimate is ₹ 16.24 crores. Thus, the petitioner, upon conclusion of any proceedings that may be taken pursuant to the proceedings under sections 67, 73 or 74 of the CGST Act, may be liable to pay such amount. Admittedly, the petitioner has already reversed input tax credit to the tune of ₹ 13,28,00,000/ - In the opinion of this Court, considering the amount paid by reversing input tax credit, the interest of the Revenue is sufficiently secured. Therefore, the provisional attachment of the above referred bank accounts of the petitioner is no longer justified. Petition allowed.

Summary

Issues:
Release of bank accounts from attachment under section 83 of the CGST Act.

Analysis:
The petitioner sought a direction to release all bank accounts, including specific ones, from attachment under Article 226 of the Constitution of India. The High Court had previously directed the release of certain accounts due to lack of legal authority for attachment. The petitioner now sought the release of remaining accounts, arguing that a substantial amount had already been reversed and paid towards GST demands. The respondent contended that an amount was still due and payable by the petitioner, although some payments had been made. The impugned orders of provisional attachment were made under section 83 of the CGST Act to protect government revenue during pending proceedings under sections 67, 73, or 74. The Commissioner had estimated a liability of a certain amount, which had increased by the time of the judgment. However, the Court noted that the petitioner had already reversed a significant sum, securing the interest of the Revenue. Therefore, the provisional attachment of the remaining bank accounts was deemed unjustified.

The judgment allowed the petition, directing the respondent to release the provisional attachment over all specified bank accounts. The Court held that the interest of the Revenue was sufficiently secured by the amount already paid through input tax credit reversal. The ruling made the rule absolute, thereby releasing the remaining bank accounts from attachment under section 83 of the CGST Act.