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Pendency of the proceeding is a pre-requisite for provisional attachment of bank account under GST : Order quashed by High Court.

Pre-requisite for exercise of powers of provisional attachment under Section 83 of the Act is the pendency of the proceedings under the provisions of sections 62, 63, 64, 67, 73 or 74 of the GST Act.

As necessary jurisdictional elements were not present on the date of passing of order for attachment, therefore the said order is not valid in the eyes of law.

 
 

This writ petition is directed against the order passed by the Commissioner of Central Tax, GST directing provisional attachment of the petitioner’s bank account in exercise of powers under Section 83 of the CGST Act, 2017.

Held by High Court

We have queried Mr. Harpreet Singh, who appears on behalf of the respondents, as to whether any proceedings were pending under any of the following Sections, i.e., Section 62, 63, 64, 67, 73 or even 74 of the Act prior to the issuance of the order dated 19.05.2020, directing provisional attachment of the petitioner’s bank accounts.

Mr. Singh fairly concedes that no such proceeding(s) was/were pending insofar as the petitioner was concerned.

To our minds, the pre-requisite for exercise of powers of provisional attachment under Section 83 of the Act is the pendency of the proceedings under the aforementioned provisions, i.e., Sections 62, 63, 64, 67, 73 or 74 of the Act.

As indicated above, the record shows that proceedings under Section 74 were initiated only after 10.11.2020. Furthermore, a perusal of order dated 18.01.2021 would show that only ₹ 40,000/- was available in the petitioner’s bank account.

Given these circumstances, it is clear that on the date when order dated 19.05.2020 was issued; the necessary jurisdictional elements were not present.

Therefore, the said order is not valid, in our view, in the eyes of law. The order dated 19.05.2020 is quashed. Resultantly, the other order, which is, dated 10.07.2020 shall also stand quashed.  

Our order, however, will not come in the way of respondents issuing a fresh order for provisional attachment, albeit, as per law.

The writ petition is disposed of in the aforesaid terms



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Published by

TaxReply

on Mar 25, 2021


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