While allowing a writ petition filed by M/s. Gehna Trading LLP, the Bombay High Court has held that the Provisional Attachment Power is to be used in only limited circumstances and it is not an omnibus power.
The Deputy Commissioner, Central Goods and Service Tax (CGST) informed the Branch Manager where the Petitioner holds a bank account that in view of the proceedings filed against Yusuf Fauzdar Shaikh, proprietor of M/s. Fashion Creations. Proceedings have been launched against the said taxable person and the Respondents were of the belief that amounts were being transferred to various persons, including the Petitioner. Hence, a direction was issued to the bank not to allow any debit.
Section 83 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Provisional Attachment power to Protect Revenue in Certain Cases”, elaborates as under:
1) 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.
(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).
On relying upon the judgment in Kaish Impex Pvt. Ltd. v/s. Union of India & Ors. Court has observed thus:-
Primary defence of the Respondents is that even if section 62, 63, 64, 67, 73 and 74 mentioned in section 83 of the Act are not referable to the case of the Petitioner since a summons is issued to the Petitioner in pursuant to the inquiry initiated against M/s. Maps Global under section 67 of the Act, by the issuance of summons the proceedings, get extended to the Petitioner also.
The division bench comprising of Justices Nitin Jamdar and M.S. Karnik observed that the legislature has no doubt conferred power on the authorities to provisionally attach bank accounts to safeguard government revenue, but the same is within the well-defined ambit. Wherefore, only upon contingencies provided therein that the power under section 83 can be exercised. This power is to be used in only limited circumstances and it is not an omnibus power.
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