Cash Credit Account Not Attachable u/s 83 of MGST Act as It Is Not Account Holder's Property: Bombay HC [Read Order]
Citing prior rulings by the Gujarat High Court and its own decision in Sargam Foods Pvt. Ltd., the Court reaffirmed that such an account falls outside the scope of attachable "property" under Section 83
![Cash Credit Account Not Attachable u/s 83 of MGST Act as It Is Not Account Holders Property: Bombay HC [Read Order]](https://images.taxscan.in/h-upload/2025/06/18/2050080-cash-credit-cash-credit-account-account-not-attachable-taxscan.webp "Cash Credit Account Not Attachable u/s 83 of MGST Act as It Is Not Account Holders Property: Bombay HC [Read Order]")
The High Court of Bombay held that a cash credit account is not the property of the account holder and therefore cannot be provisionally attached under Section 83 of the Maharashtra Goods and Services Tax (MGST) Act,2017.
Skytech Rolling Mill Pvt. Ltd, petitioner-assessee, had approached the Court against the provisional attachment of its cash credit account by ICICI Bank. The attachment was made on 8 May 2025 under Section 83 of the MGST Act by Respondent No. 1.
The Court noted that the account attached was a cash credit account, and the main issue was whether such an account could be provisionally attached under Section 83 of the MGST Act.
It held that Section 83 allows attachment of property, including bank accounts, belonging to the taxable person. However, a cash credit account is a loan facility and not an asset of the account holder. Therefore, it could not be treated as "property" under this section.
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The petitioner’s counsel referred to Gujarat High Court rulings in Manish Scrap Traders and J.L. Enterprises, where similar attachments were quashed. He also relied on the Bombay High Court’s decision in Sargam Foods Pvt. Ltd., which held that a cash credit account cannot be attached, as it does not belong to the account holder.
The division bench comprising Justice Jithendra Jain and Justice M.S Sonak noted that no contrary judgments were presented and reaffirmed that a cash credit account could not be considered the account holder’s property under Section 83 of the MGST Act.
It directed the authorities to withdraw the attachment letter dated 8 May 2025 issued to ICICI Bank and inform the bank within 24 hours.
The bench clarified that this would not stop the authorities from recovering dues through other legal methods.
Although the petitioner could have been asked to pursue alternate remedies, the Court held that the attachment order was without jurisdiction and against settled law. It, therefore, exercised its powers under Article 226.
The petition was allowed, and the provisional attachment was quashed.
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