Synopsis: The Hon’ble HC, Gujarat in the matter of M/s Alfa Enterprise v. State of Gujarat [R/Special Civil Application No. 16698 of 2019] directs the Revenue to withdraw attachment of the bank account of the Petitioner and unblock the credit in the electronic credit ledger.
M/s Alfa Enterprise’s (“the Petitioners”) having bank account in IDBI Bank Limited, Ahmedabad, Current Account, godown/ office were attached and credit in electronic credit ledger was blocked under Section 83 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) vide Order dated August 3, 2018 and the same was not made available to the Petitioner by the Assistant Commissioner of Sales Tax (“Respondents”).
The Petitioner filed writ for directing to the Respondents to withdraw the Order dated August 3, 2018.
The Hon’ble HC, Gujarat in R/Special Civil Application No. 16698 of 2019 decided on October 1, 2019 has held as under:
- Section 83 of the CGST Act empowers provisional attachment of property, subject to pendency of the proceedings under Sections 62, 63, 64, 67, 73 or 74 of the CGST Act. The same does not contemplate provisional attachment pending any proceeding under Section 83 of the CGST Act, inasmuch as, there can never be any proceeding pending under Section 83 of the CGST Act as the same only empowers the State authorities to provisionally attach the property of a taxable person, subject to the provisions of Section 83 of the CGST Act being satisfied.
- The exercise of powers under Section 83 of the CGST Act, whereby the bank account of the Petitioner has been attached is totally without any authority of law.
- Directed the Respondents to unblock the credit as blocking of credit is not backed by any statutory provision.
- Further, directed the Respondents to withdraw attachment of IDBI Bank Account and current account
- Regarding attachment of godown/office, the Respondents agreed to open the seal.
Recently in the case of M/s Kanal Enterprise [R/Special Civil Application No. 17673 of 2019 decided on October 10, 2019], the Hon’ble HC, Gujarat directs the Respondent to release the attachment of the bank account of the Petitioner and unblock the credit available in the electronic credit ledger as ad interim relief and accepted the Petitioner’s contention that Section 83 of the CGST Act can be invoked during the pendency of proceedings under Sections 62, 63, 64, 67, 73 or 74 of the CGST Act, however, there is no power vested in the Respondents to invoke the provisions of Section 83 of the CGST Act in the proceedings launched under Section 71(1) of the CGST Act. Therefore, the provisional attachment of the bank account as well as the stock of the Petitioner is without authority of law.
Section 83 of the CGST Act
“83. Provisional attachment to protect revenue in certain cases.
(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, 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).”