Observations made by Commissioner while examining objection raised  to provisional attachment of bank accounts u/s 83 of CGST Act will not Bar Assessment Proceedings: Telangana HC

In a significant case, the Telangana High Court (HC) held that observations made by the Commissioner while examining the objection raised to provisional attachment of bank accounts under section 83 of the Central Goods and Service Tax (CGST) Act will not influence the assessment proceedings.

The petitioner challenged the legality and validity of the notices dated 14.02.2023 issued by respondent No.1 addressed to the bankers of the petitioner i.e., respondents No.5, 6 and 7 provisionally attaching bank accounts of the petitioner under Section 83 of the Central Goods and Services Tax Act, 2017 (‘the CGST Act’).

Section 83 of the CGST Act enables the ‘Tax Officer’ to attach any property of a ‘Taxable person’ including the bank account when there is pendency of any proceeding under Sections 62, 63, 64, 73 and 74 of the CGST Act, 2017.

It was submitted that the petitioner has deposited more than Rs.5 crores out of the alleged outstanding Goods and Services Tax (GST) to the tune of Rs.8,42,00,000.00.  Further, it was stated that under Rule 159 of the Central Goods and Services Tax Rules, 2017, more particularly Sub Rule (5), the petitioner has filed an objection before the 1st respondent against the invocation of power under Section 83 of the Central Goods and Services Tax Act, 2017. 

The court directed the respondent to pass an appropriate order under Rule 159 of the Central Goods and Services Tax Rules, 2017 and place the same before the Court on 17.03.2023. Further the Commissioner, Ranga Reddy GST Commissionerate, has passed Order No.1/2023 dated 15.03.2023 under Rule 159(5) of the Central Goods and Services Tax Rules, 2017. At the end of a long narration, Commissioner has released the bank accounts of the petitioner from provisional attachment.

 It was argued that in the course of the narration, the Commissioner has made certain observations, which may come in the way of a fair adjudication in the assessment proceedings.   

A two-member bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji held that observations made by the Commissioner while passing the order dated 15.03.2023 was in the context of examining the objection raised by the petitioner to provisional attachment of bank accounts under Section 83 of the CGST Act and those would not influence the assessment proceedings that may be initiated against the petitioner.

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