2021 (9) TMI 612 - HC - GST

Provisional attachment of property - invocation of Section 83 of the CGST Act, 2017 - on date the order of provisional attachment was made, no proceedings under sections 62/63/64/67/73/74 of the Act were pending - HELD THAT - The order is made on November 9, 2020 - It is evident from the reply affidavit that as on November 9, 2020, no proceedings against the petitioner had been initiated. If at all, proceedings were initiated on December 3, 2020 when the search of the petitioner s premises were conducted. Proceedings initiated against an entity different from the entity whose bank account is attached would not clothe the concerned officer, otherwise empowered to order attachment of property, to invoke Section 83 without the jurisdictional fact being present. If so invoked, the order has to be held ultra vires Section 83 - no proceedings of the nature as referred to in Section 83 of the Act were pending against the petitioner as on November 9, 2020, the order of provisional attachment is ultra vires Section 83 of the Act. Accordingly, the order of provisional attachment stands set aside. The writ petition stands allowed with direction to the respondents to forthwith defreeze the bank account of the petitioner.

Summary

Issues:
Challenge to provisional attachment order under Section 83 of the Central Goods and Services Tax Act, 2017.

Analysis:
The petitioner challenged an order of provisional attachment of property dated November 9, 2020, issued by the Assistant Commissioner (Anti-Evasion) under Section 83 of the Act. The petitioner's counsel argued that at the time of the attachment, no proceedings under relevant sections of the Act were pending, thus questioning the jurisdictional basis for invoking Section 83. Citing legal precedents, the petitioner contended that the order of attachment was ultra vires the Act. The respondent argued that the petitioner's premises were searched on December 3, 2020, under Section 67(2) of the Act, implying pending proceedings.

The Court considered the submissions and noted that the crucial date for assessing the validity of the attachment was November 9, 2020, when the order was issued. It found that no proceedings were initiated against the petitioner by that date. The Court rejected the argument that proceedings against a different entity justified the attachment, citing a Supreme Court decision. It held that without the necessary jurisdictional fact, invoking Section 83 was impermissible, rendering the attachment order ultra vires.

Consequently, the Court held that the provisional attachment order was ultra vires Section 83 of the Act and set it aside. The writ petition was allowed, directing the respondents to immediately defreeze the petitioner's bank account. No costs were awarded. The Court clarified that its decision did not prevent the respondents from taking lawful actions in the matter.