2023 (10) TMI 574 - HC - GST

Legality and validity of the provisional attachment of the bank account of the petitioner - Document Identification Number (DIN) was not mentioned in the provisional attachment order due to technical difficulty - non-payment of the tax due - HELD THAT - Attachment of bank account, even if it be a provisional measure, is a serious intrusion into the private affairs of a citizen. Being a drastic measure, there must be overwhelming reasons to justify such an action. It is not a case of complete evasion of tax by the petitioner. Petitioner has on its own paid Rs. 98,92,412.00 which has been acknowledged by the respondents. According to the respondents, there is a short-payment of the tax due. It is mentioned that the quantum mentioned by the respondents is only a provisional figure even before issuance of show cause notice; not to speak of any adjudication order. In such a case, attaching bank account of the petitioner is not at all justified and would be wholly without jurisdiction; continuation thereof would be highly oppressive and violative of Articles 14 and 21 of the Constitution of India. When an order is ex facie without jurisdiction as in the present case, it would not be just and proper to relegate a taxable person to the forum of alternative remedy - the provisional attachment order dated 22.05.2023 set aside - petition allowed.

Summary

Issues:
The legality and validity of the provisional attachment of the bank account under Section 83 of the Central Goods and Services Tax Act, 2017 without proper justification and reasons.

Summary:
The petitioner challenged the provisional attachment of their bank account, arguing that the order lacked a Document Identification Number (DIN) as required by a circular and that no proceedings under Section 74 of the CGST Act had been initiated. Additionally, the petitioner questioned the lack of reasons provided for the attachment, considering it a drastic measure. The court directed the respondent's counsel to provide explanations for these issues.

During the hearing, it was revealed that the total tax payable by the petitioner was assessed to be Rs. 2,20,62,916.00, with a shortfall of Rs. 1,21,70,500.00 after the petitioner's payment of Rs. 98,92,412.00.

The respondent's counsel argued that the absence of DIN in the attachment order was due to a technical issue and that the reason for the attachment was available in the file. However, the court found the reasons provided insufficient to justify the drastic measure of attaching the bank account, especially considering the partial payment made by the petitioner.

The court emphasized that attaching a bank account is a serious intrusion into a citizen's private affairs and should only be done with overwhelming justification. As the attachment was deemed unjustified and without jurisdiction, the court set aside the provisional attachment order, stating that it would not be fair to require the petitioner to seek an alternative remedy.

Ultimately, the writ petition was allowed, and no costs were imposed. Any pending miscellaneous applications were to be closed as a result of the judgment.