Remedy Against Provisional Attachment Must be Availed under Rule 159(5) under CGST Rules Before Approaching Court: Allahabad HC [Read Order]

The Allahabad High Court has held that remedy against provisional attachment must be availed Rule 159(5) of the Central Goods and Service Tax Rules, 2017 before approaching court.

Shri Anoop Trivedi, Senior Counsel, assisted by Shri Anuj Agarwal, counsel appeared for the petitioner, Shri Om Prakash Mishra, for respondent no. 2 and Shri Gaurav Mahajan, counsel for respondent no. 1.

Smt. Lalita, the petitioner challenged the legality, propriety and correctness of the order dated 21.04.2023 passed by the Commissioner, Central Goods and Service Tax, respondent no. 1 whereby and whereunder the current account of the petitioner i.e. A/C No. 355401001796 maintained with ICICI Bank situate at 4, Part A, Gaur Global Village Crossing Republic, Ghaziabad-201009 has been provisionally attached exercising powers under Section 83 of the CGST Act, 2017 read with Rule159 (1) of the CGST Rules '2017'.

Respondent no. 1 initiated an investigation against 3 persons including the husband of the petitioner Shri Rajiv Sharma for availing and passing on the wrong Input Tax Credit by creating various firms without a supply of goods. During the course of the investigation, an order dated 02.04.2022 was passed by respondent no. 1 provisionally attaching the Bank account of the petitioner.

Since the attachment order under Section 83 ceases to have effect after the expiry of one year as contemplated under Section 83 (2) of the CGST Act, 2017 petitioner moved an application requesting for the de-attachment of the Bank account on 03.04.2023 on the ground that the petitioner is not a taxable person as defined under Section 2 (107) of the CGST Act, 2017, no investigation is pending against her and the attachment of her Bank account cannot be continued.

The department to protect the interest of revenue has passed the order dated 21.04.2023 exercising powers under Section 83 of the CGST Act, 2017 read with Rule 159 (1) of the CGST Rules 2017 provisionally attaching the current account of the petition.

The exercise of power is by law and calls for no interference by this Court it is also contended by Shri Mahajan that the petitioner ought to have invoked Rule 159 (5) of the CGST Rules 2017 by filing objections against the attachment rather than directly approaching this Court invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.

Since the bank account of the petitioner has remained attached since April 2022 a division bench comprising Pritinker Diwaker, Chief Justice and Ashutosh Srivastava, Justice directed the petitioner to approach respondent no. 1 within two weeks from today, under Rule 159 (5) by filing objections the respondent no. 1 shall make all endeavour to take a decision thereupon as per law expeditiously preferably within three weeks of filing such objection under Rule 159 (5) of the CGST rules, 2017.

To Read the full text of the Order CLICK HERE

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