A division bench of the Bombay High Court, while considering a petition by Originative Trading Private Limited, directed the Commissioner to furnish a certified copy of the opinion formed by the Commissioner before filing an objection against the show-cause notice for provisional attachment under the CGST Act.
The petitioner, Originative Trading Private Limited, purchased the goods locally from wholesale traders which are consolidated at the level of the wholesale trader and thereafter are dispatched to the warehouse of the logistics company, from where the goods are sent to the CFS Terminals at the customs stations. The said goods are released from export only after due verification by the customs officers. On 18th February, 2021, the office of the respondent no.3 initiated investigation against the petitioner and conducted search at the petitioner’s premises during which the original documents were seized. During the investigation, on 23rd February, 2021, the CBIC issued the circular laying down detailed guidelines for field formations in relation to the attachment under section 83 of the CGST Act.
The petitioner challenged the constitutional validity of the circular dated 23rd February, 2021 as ultra vires the provisions of the Central Goods and Services Tax Act, 2017 or with an alternative plea to read down the circular dated 23rd February, 2021 to make the recording of reasons or grounds of attachment mandatory in the attachment order or Form DRC-22 issued in terms of Rule 159(1) of the CGST Rules.
The petitioner contended that the said circular providing that the Commissioner shall record such an opinion on file and not communicate the same to the taxable person would not amount to an order of provisional attachment under section 83 of the CGST Act.
A bench comprising Justices R.D. Dhanuka & S.M.Modak observed that if the party against whom such an order is passed remains on file, the aggrieved party will not come to know about such order and would not have remedy to challenge such order.
“In our view, the petitioner would be entitled to the copy of the opinion formed by the Commissioner before filing an objection,” the bench said.
“Insofar as the objection raised by the learned counsel for the respondent that the petitioner ought to have filed an appeal against the order of provisional attachment and this petition is not maintainable on that ground is concerned, in view of the fact that the petitioner has impugned the validity of the circular issued by the respondents, the same cannot be challenged before the Appellate Authority. We are thus not inclined to reject the writ petition on the ground of an alternate remedy available to the petitioner under the provisions of the CGST Act,” the bench said.
Originative Trading Private Limited VS Union of India
CITATION: 2022 TAXSCAN (HC) 107
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