HC tells GST officials: Stop mechanically attaching bank accounts

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In an important order, the Gujarat high court has said that tax officials should stop mechanically attaching bank accounts of alleged GST defaulters as soon as the department carries out searches, and it has ordered the Centre to formulate a guideline in this regard.

The HC was furious over the practice of attaching bank accounts by the Central Goods & Service Tax (CGST) officials as soon as they carry out searches on suspicion of tax evasion. This case involved a scrap dealer whose two bank accounts were seized. There was a total amount of Rs 22,065 lying in those accounts. The bench of Justice J B Pardiwala and Justice I J Vora said that the objective of attachment of bank accounts under Section 83 of the GST Act is to secure the interest of revenue. On the paltry amount seized in bank accounts, the judges questioned, “What good purpose the department is going to achieve by provisionally attaching the two bank accounts with balance of a paltry amount of Rs 22,065?”

The HC observed that it gets numerous cases complaining about attachment of bank accounts under Section 83.

This exercised is carried out mechanically.

“This mechanical exercise of the power is not appreciated,” it commented and reminded the government that various courts in different judgments have warned the government officials to show restraint in attaching bank accounts, but the court keeps getting numerous cases of this kind.

The high court has directed the government that this practice “should stop at the earliest. So much judicial time is wasted in all such matters wherein the law is so well settled”.

The HC noticed that the powers vested on GST officials under Section 83 are similar to powers vested in income tax officials in attaching bank accounts of an assessee.

While the I.T department has got a guideline to use the power, GST department does not have one.

The bench has ordered the Centre and the Central Board of Direct Taxes (CBDT) to read this judgment “thoroughly and consider issuing appropriate instructions or guidelines at the earliest” for attachment of bank accounts.

Source from: https://timesofindia.indiatimes.com/city/ahmedabad/stop-mechanically-attaching-bank-accounts-hc-tells-gst-officials/articleshow/80337201.cms

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