GST: Order of Attachment of Bank Account is Prima Facie without Authority of Law, says Gujarat HC [Read Order]

The Gujarat High Court has observed that, the order of attachment of bank account is prima facie without the authority of law and the order of blocking of credit is not backed by any statutory provision.

The petitioner sought a direction to the respondent authorities to forthwith withdraw bank attachment. Since the order of attachment of the bank account as well as godown/office and blocking of credit were not placed on record and were not made available to the petitioner.

The division bench comprising of Justice Harsha Devani and Justice Sangeeta K. Vishen said that, Section 83 of the CGST Act provides for provisional attachment to protect revenue in certain cases and lays down that 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. Thus, section 83 of the CGST Act empowers provisional attachment of property, subject to the pendency of the proceedings under sections 62, 63, 64, 67, 73 or 74 of the CGST Act. The same does not contemplate, and rightfully so, 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 being satisfied.

While allowing the petition, the Court also observed that, “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. The order of attachment of bank account is prima facie without the authority of law and the order of blocking of credit is not backed by any statutory provision, the respondents are directed to forthwith withdraw the attachment of the bank account of the petitioner with the IDBI Bank”.