The Bombay High Court directed the authority to withdraw the provisional attachment of the bank accounts.
The petitioner, AJE India Private Limited a company incorporated under the Companies Act, 1956, is engaged in the business of manufacture and supply of carbonated fruit drinks, such as, Big Cola, Big Orange Cola, Big Lemon and similar other products.
The petitioner has been manufacturing such fruit juice based drinks since December, 2017 having more than 5% juice content in apple drink and 2.5% in respect of lemon drink. Petitioner has been classifying such goods under Tariff Item 2202 99 20 of the Customs Tariff Act, 1975 and specified at Serial No.48 under Schedule-II as “fruit pulp or fruit juice based drinks” of the Central Government Notification dated 28th June, 2017 taxable at the rate of 12%, on the basis of such classification petitioner has been filing its GST returns and paying the taxes regularly.
The departmental authorities initiated investigation sometime in March, 2019 with regard to classification of the goods which was however dropped. Such inquiry was revived in January, 2020 but no progress was made because of COVID-19 pandemic and the resultant lockdown.
Then officials of respondent authority visited the petitioner’s factory for further investigation. Summons were issued to the petitioner itself for appearance of director and other authorized representatives which was complied with.
However, the impugned order was issued by the respondent and addressed to the Branch Manager, ICICI Bank, Nagari Reespost, Mohopada, Khalapur, Raigad provisionally attaching bank accounts of the petitioner under section 83 of the Central Goods and Services Tax Act, 2017.
The petitioner sought the quashing of order passed by respondent authority in respect of provisionally attaching the bank accounts of the petitioner.
The Division judge bench of Justice Ujjal Bhuyan and Abhay Ahuja held that the Commissioner is conferred with the power of provisional attachment under section 83 it would not ipso-facto mean that he can straightaway proceed to provisionally attach any property including bank accounts of a taxable person merely on the ground of pendency of proceedings under section 67.
Therefore, the Court stayed the impugned order and directed withdrawal of the provisional attachment of the bank accounts of the petitioner mentioned in the order forthwith.
However, the court directed the petitioner to furnish an undertaking before the Court by way of affidavit that it shall not alienate its land, building, plant, and machinery during the pendency of the present proceeding.
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