Delhi HC Upholds GST Intelligence's Power to Provisionally Attach Bank Accounts [Read Order]

The Delhi High Court has upheld the power of the Directorate General of GST Intelligence (DGGI) to provisionally attach a taxpayer's bank accounts, dismissing a petition which challenged the provisional attachment of its two ICICI Bank accounts by the Principal Additional Director General, DGGI.

Counsel for the petitioner,M/S GMG Tradelink Pvt. Ltd. contended that the DGGI officer was not duly authorized to pass such an order, arguing that under Section 83 of the Central Goods and Services Tax Act, 2017, only a 'Commissioner' could exercise the power of provisional attachment.

Per contra, the court relied on Notification No. 14/2017 dated 1st July 2017, produced by the Respondent's counsel.

Section 83. “Provisional attachment to protect revenue in certain cases.[(1)Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, 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 or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

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(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).”

The division bench comprising Justice Prathiba M. Singh and Justice Shail Jain noted that the notification equates the rank of Principal Additional Director General, GST Intelligence, with that of a Principal Commissioner of GST. In view of this notification, the court found the petitioner's challenge to the officer's jurisdiction to be unsustainable.

Accordingly, the court disposed of the writ petition. However, it permitted the petitioner to file fresh objections against the attachment and directed the DGGI to communicate the reasons for the provisional attachment within two weeks. The court clarified that all legal remedies would remain available to the petitioner thereafter.

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