2021 (2) TMI 290 - HC - GST

Provisional attachment of the immovable properties as well as the cash credit account of the writ-applicant - Section 83 of the SGST Act, 2017 - HELD THAT - The cash credit account of the writ-applicant should not have been ordered to be provisionally attached under Section 83 of the SGST Act, 2017. The position of law in this regard is now well-settled. Even otherwise, Mr. Poddar, the learned counsel would submit that for a liability of ₹ 3 lac and odd amount, the authority ought not to have proceeded to provisionally attached the immovable properties worth rupees more than 10 crores. He would further submit that as the cash credit account came to be freezed and rather provisionally attached, all other accounts including the term deposits have also been provisionally attached. The provisional attachment of the cash credit account cannot continue and the same is hereby lifted. Ultimately, if the entire liability as sought to be fasten is discharged by the writ-applicant, then the authority may continue passing appropriate orders lifting the provisional attachment of the immovable properties also - Application disposed off.

Issues:
1. Validity of the impugned order under the Gujarat Goods and Services Tax Act.
2. Quashing of the attached property and bank accounts.
3. Provisional release of the bank accounts.
4. Coercive actions against the petitioner.
5. Award of costs.
6. Provisional attachment of immovable properties and cash credit account under Section 83 of the SGST Act, 2017.

Analysis:
1. The writ-applicant challenged the validity of the impugned order under the Gujarat Goods and Services Tax Act, seeking relief to declare it as without authority of law and ultra vires the provisions of the Act. The Court heard arguments from both parties' counsels and examined the show-cause notice served under Section 74 of the SGST Act, 2017. The liability amounting to ?3,46,133 was the subject of contention, leading to the provisional attachment of immovable properties and the cash credit account of the writ-applicant by the Assistant Commissioner of State Tax, Surat.

2. The Court, after deliberation, found that the provisional attachment of the cash credit account should not have been ordered under Section 83 of the SGST Act, 2017. It was noted that the law prohibits such action for a liability amounting to ?3 lakh. The Court acknowledged the disproportionate nature of attaching properties worth over ?10 crores for a relatively small liability. The writ-applicant's counsel argued against the provisional attachment, highlighting the consequential freezing of other accounts, including term deposits. Consequently, the Court lifted the provisional attachment of the cash credit account maintained with Kotak Mahindra Bank Limited, Surat.

3. The Court refrained from commenting on the provisional attachment of immovable properties but emphasized that the provisional attachment of the cash credit account was unjustified and lifted it. The Court indicated that if the writ-applicant settles the liability, the authority may proceed to lift the provisional attachment of immovable properties accordingly. The judgment concluded by disposing of the writ-application based on the above considerations and actions taken.

4. The judgment did not delve into the issue of coercive actions against the petitioner, as the focus was primarily on the validity of the impugned order, the attachment of assets, and the subsequent relief sought by the writ-applicant. The Court's decision was centered on the disproportionate nature of the provisional attachment in relation to the liability amount and the legal provisions governing such actions under the SGST Act, 2017.

5. The issue of awarding costs was briefly mentioned in the relief sought by the writ-applicant, but the judgment did not provide specific details or rulings regarding the costs. The Court's decision primarily addressed the substantive issues related to the impugned order, attachment of assets, and the legality of the provisional attachment under the relevant legal framework.

6. The judgment extensively discussed the provisional attachment of immovable properties and the cash credit account under Section 83 of the SGST Act, 2017. The Court's analysis focused on the disproportionate nature of the attachment, the legal principles governing such actions, and the appropriate course of action to address the writ-applicant's grievances. The decision to lift the provisional attachment of the cash credit account underscored the Court's consideration of fairness and proportionality in enforcing tax liabilities.

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