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2021 (1) TMI 365 - HC - GSTAttachment of Bank Accounts of petitioner - contention of petitioner is that the respondent authorities have taken action against the petitioner under Section 83 of the Act, pursuant to proceedings initiated under Section 71 of the Act, whereas Section 83 of the Act, on its terms, cannot be invoked in such a situation - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - The impugned order cannot be sustained. It is clear from a plain reading of Section 83 that action thereunder is predicated upon pendency of proceedings under Sections 62, 63, 64, 67, 73 or 74 of the Act. The attachment of bank account entails serious consequences to the assessee, particularly in the case of a running concern such as the petitioner herein. The power to attach the bank account must therefore be exercised only in strict compliance with the statutory power, and cannot be extended to cover situations which are not expressly contemplated by the section. Absent the statutory precondition for exercise of the power of attachment, any order under Section 83 is wholly illegal and unsustainable. In the present case, without going into the merits of the allegations made against the petitioner, the admitted position is that no proceedings under any of the provisions mentioned in Section 83 of the Act were in fact initiated against the petitioner. In these circumstances, the impugned order is ultra vires the statutory powers of the respondent no. 2, and is hereby quashed. Petition allowed.
Issues Involved:
1. Legality of the provisional attachment of the petitioner's bank account under Section 83 of the Central Goods and Services Tax Act, 2017. 2. Compliance with statutory requirements for invoking Section 83. 3. Consequences of the attachment order on the petitioner. Detailed Analysis: Issue 1: Legality of the provisional attachment of the petitioner's bank account under Section 83 of the Central Goods and Services Tax Act, 2017 The petitioner challenged the communication dated 25.11.2020/01.12.2020, whereby their bank account was attached by respondent no. 2 under Section 83 of the Central Goods and Services Tax Act, 2017 ("the Act"). The petitioner contended that the attachment was pursuant to proceedings under Section 71 of the Act, which does not justify invoking Section 83. Issue 2: Compliance with statutory requirements for invoking Section 83 The court examined the statutory provisions, including Sections 67, 71, and 83 of the Act. Section 83 allows for provisional attachment of property during the pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74 of the Act. The court noted that the attachment order was based solely on proceedings under Section 71, which is not listed in Section 83. The court referred to the decision in *Kaish Impex Private Limited vs. Union of India & Ors.*, where it was held that Section 83 cannot be invoked unless proceedings under the specified sections are pending. The court reiterated that Section 83 is a drastic power and must be exercised within its well-defined ambit. The statutory preconditions for invoking Section 83 were not met in this case, as no proceedings under the relevant sections were initiated against the petitioner. Issue 3: Consequences of the attachment order on the petitioner The court acknowledged the severe consequences of attaching a bank account, especially for a running concern like the petitioner. It emphasized that such power must be exercised in strict compliance with statutory provisions. Given the absence of statutory preconditions, the court found the attachment order to be wholly illegal and unsustainable. Conclusion: The court quashed the impugned order dated 25.11.2020/01.12.2020 as ultra vires the statutory powers of respondent no. 2. The court clarified that this order does not preclude the respondents from taking lawful action against the petitioner, including passing orders under Section 83 in accordance with statutory conditions. The petitioner assured the court of their cooperation in providing information and documents as required by respondent no. 2. The writ petition was allowed, and the pending application was disposed of.
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