PROVISIONAL ATTACHMENT OF PROPERTY., Goods and Services Tax - GST

[Sadanand Bulbule]

Dear Sirs,

Section 83 of the GST Act, 2017 reads as under.

Provisional attachment to protect revenue in certain cases.

83. (1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, if the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).

The question is whether the GST Commissioner, either under CGST or SGCT is authorized to delegate his powers under Section 83 to his subordinate proper officers to provisionally attach the property and Bank account? And what are the relevant provisions to do so?

Kindly enlighten.

With regards to experts & visitors of TMI.

Posts / Replies

[KASTURI SETHI]

=SECTION 167.of CGST Act Delegation of powers. - The Commissioner may, by notification, direct that subject to such conditions, if any, as may be specified in the notification, any power exercisable by any authority or officer under this Act may be exercisable also by another authority or officer as may be specified in such notification.

Section 2(91) “proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board;

[Sadanand Bulbule]

Sethi Sir

Very Good Morning. Thank you so much for your quick response on the question of provisional attachment of property.

In this connection, I humbly draw the kind attention of our experts towards the recent judgement dated 28/08/2019 of the Hon'ble Gujarat High Court rendered in the case of Valerius Industries Vs. Union of India reported in 2019 (9) TMI 618 exactly on the subject under reply. Vide Para No 35 of the said judgement, the Hon'ble Court has categorically opined that the Commissioner of State Tax delegating his power under Section 83 of the SGST Act to the subordinate proper officers cannot be defended.

The credibility of delegation of such power under Section 83 of the Act has not been challenged so far in Karnataka according to my limited undrstanding.But in view of the judgement (supra), there is every possibility that the affected parties may question the credibility of delegation of such powers to the proper officers on the basis of the clear opinion expressed by the Court.The legal position being so as opined by the Hon'ble Gujarat High Court, the question is what would be the status of similar cases which have been provisionally attached by the State proper officers here? In view of the this judgement, whether the proper officers could be requested to withdraw such attachment orders? Or to seek specific judicial remedy individually on par with the judgement(supra)?

Our esteemed experts are requested to offer their sagacious suggestions on the possible implications of the judgement(supra)?

Happy Sunday.

[KASTURI SETHI]

Nothing untoward is going to happen for the department. Litigation is a continued process. It is cock-sure that the department will not accept this judgement and will knock at the door of Hon'ble Supreme Court. All the Courts interpret the law. You are to go by the Act.The High Court has not struck down Section 83. The High Court has just opined. This section is still in force. You know that the judgment of Gujarat High Court is always challengeable and the department has sufficient time period to file writ petition with the Hon'ble Supreme Court against this decision of the High Court. Notwithstanding the above judgement, the action taken by the Department is as per letter and spirit of GST law.

[Sadanand Bulbule]

Excellent Sir. In this scenario, the officers working in the department need not get demotivated. At the same time, the habitual & fraudulent evaders of tax need not celebrate this kind of opinion. As rightly said, still the doors for final touchstone is not yet closed.

Warm regards.

[KASTURI SETHI]

Rightly observed by you.

[Swapnil Jain]

refer section 5(2) of the CGST Act