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Validity of attachment by the GST Commissioner not having territorial jurisdiction over that person?

Provisional attachment done u/s 83 of a person specified in section 122(1A) is invalid if it is done by the commissioner not having territorial jurisdiction over that person.

The opening sentence of Section 122(1) of the CGST Act also refers to a taxable person. Thus, the assets of a person falling under Sub-section (1A) of Section 122 of the CGST Act can be attached only by a Commissioner who exercises jurisdiction in respect of the said taxable person.

High Court also held that mere suspicion that the petitioner is a dummy company, which is founded on the basis of statements that one of the directors of the petitioner company is an employee of other company (against which GST proceedings are going on), would clearly fall foul of the requirement of forming an opinion, as it does not meet the standards required for taking an action under Section 83 of the CGST Act.


The case is such that the commissioner passed attachment order on the ground that the petitioner company had fraudulently transferred ITC amounting of Rs.36.6 crore to another company without supplying any goods.

Revenue found that a director of the petitioner company, was also an employee at the alleged other company against which GST proceedings were going on.

And on this basis revenue alleged that the petitioner company was also created as a dummy company of that other company for availing ITC by fraudulent means.

Revenue held that if any proceedings under Chapter XIV of the CGST Act were pending, the Commissioner was empowered to provisionally attach the bank account of the taxable person under Section 83(1) of the CGST Act, for the purpose of protecting the interest of the Government revenue.

Held by High Court

Reference is taken from Section 83 of the CGST Act.

“83. Provisional attachment to protect revenue in certain cases.— (1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, 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 or any person specified in sub-section (1A) of Section 122, in such manner as may be prescribed.

A plain reading of the said Section 83 of the CGST Act indicates that ‘the Commissioner’ can take an action under the said Section provided that the following conditions are fulfilled:

(i) that proceedings under Chapter XII, Chapter XIV and Chapter XV of the CGST Act have been initiated;

(ii) that the Commissioner is of the opinion that it is necessary to provisionally attach any property including bank account for the purpose of protecting the interest of the Revenue.

If the aforesaid conditions are met, ‘the Commissioner’ can provisionally attach the property and/or bank account “belonging to the taxable person or any person specified in sub-section (1A) of Section 122”

The term ‘the Commissioner’ is defined under Section 2(24) of the CGST Act as under:

“2(24) “Commissioner” means the Commissioner of central tax and includes the Principal Commissioner of central tax appointed under Section 3 and the Commissioner of integrated tax appointed under the Integrated Goods and Services Tax Act.”

In view of the above, the term ‘the Commissioner’ as used in Section 83 of the CGST Act would necessarily refer to the Commissioner who exercises jurisdiction under the CGST Act in resp.......
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May 26, 2023

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