2019 (11) TMI 279 - HC - GST

Provisional attachment of Bank Accounts - time limitation for such attachment to be in effect - Section 83 of the CGST Act, 2017 - HELD THAT - Perusal of Annexures-D and E, it is not relevant to Section 74 of the Act. Under Section 74 of the Act, petitioner has not been issued notice. The pendency of proceedings under Section 83 of the Act would be only after issuance of notice. In the absence of issuance of notice under Section 74 of the Act or any other Sections quoted in Section 83 of the Act, one cannot draw inference that there is pendency of any proceedings under Section 74 of the Act in the present case. Respondents have not apprised by producing any documentary evidence to show that one of the ingredients under Section 74 of the Act has been invoked so as to pass the impugned order under Section 83 of the Act. Accordingly, writ petition stands allowed. Annexures-D and E are set aside. Petition allowed.

Summary

Issues:
1. Validity of provisional attachment notice dated 30.03.2019.
2. Legality of recovery proceedings pending adjudication.
3. Interpretation of Section 83 of the Central Goods & Services Tax Act, 2017.
4. Compliance with procedural requirements under Sections 62, 63, 64, 67, 73, and 74 of the Act.

Analysis:
1. The petitioner sought the quashing of the provisional attachment notice dated 30.03.2019, claiming it to be illegal and untenable. The respondents relied on Section 83 of the Act, stating that the attachment would cease after one year from the order under Section 85. The court found that the provisions of Section 83 were not attracted as the necessary ingredients were not met. The absence of notice under Section 74 or any other relevant section indicated no pending proceedings under Section 74, leading to the allowance of the writ petition and setting aside of Annexures-D and E.

2. The petitioner challenged the initiation of recovery proceedings through the provisional attachment notice while adjudication was pending. The petitioner argued that certain sections like 62, 63, 64, 67, 73, or 74 were under consideration, which is a requirement for passing attachment of a bank account. The respondents contended that the petitioner had already provided requested documents and that the summons issued fell under Section 74. However, the court found that the documents provided did not relate to Section 74, and the absence of a notice under Section 74 or any other relevant section indicated no basis for passing the impugned order under Section 83.

3. The court delved into the interpretation of Section 83 of the Act, emphasizing the need for the invocation of relevant provisions and the issuance of notices before concluding the existence of pending proceedings. The respondents were directed to issue notices by invoking appropriate legal provisions and take further action accordingly. The court rejected the argument that the non-quoting of provisions in the orders vitiated the proceedings, highlighting the importance of compliance with the statutory requirements for invoking attachment provisions.

In conclusion, the judgment focused on the procedural aspects of invoking attachment provisions under the GST Act, emphasizing the necessity of meeting statutory requirements and providing documentary evidence to support the initiation of recovery proceedings. The court's decision to allow the writ petition and set aside the provisional attachment notice was based on the lack of compliance with the procedural prerequisites outlined in the relevant sections of the Act.