M/S ALFA ENTERPRISE VERSUS STATE OF GUJARAT

Release of attached Bank Accounts as well as godown/office and blocking of credit – section 83 of the Central Goods and Services Tax Act, 2017 – HELD THAT:- Section 83 of the CGST Act empowers provisional attachment of property, subject to pendency of the proceedings under sections 62, 63, 64, 67, 73 or 74 of the CGST Act. The same does not contemplate, and rightfully so, provisional attachment pending any proceeding under section 83 of the CGST Act, inasmuch as, there can never be any proceeding pending under section 83 of the CGST Act as the same only empowers the State authorities to provisionally attach the property of a taxable person, subject to the provisions of section 83 being satisfied – It appears that the exercise of powers under section 83 of the CGST Act, whereby the bank account of the petitioner has been attached is totally without any authority of law.

Blocking of the credit of ₹ 6,63,51,380/- available in the electronic credit ledger of the petitioner – HELD THAT:- The learned Assistant Government Pleader even with the assistance of the instructing officer is not in a position to point out any provision of law which empowers the respondent authorities to block the credit.

Attachment of godown/office – HELD THAT:- The learned Assistant Government Pleader has submitted that the respondents would open the seal.

Having regard to the fact that the order of attachment of bank account is prima facie without authority of law, and the order of blocking of credit is not backed by any statutory provision, the respondents are directed to forthwith withdraw the attachment of the bank account of the petitioner with the IDBI Bank, Prahladnagar Branch and to unblock the credit of ₹ 6,63,51,380/- available in the electronic credit ledger forthwith.

Stand over to 17th October, 2019.

No.- R/SPECIAL CIVIL APPLICATION NO. 16698 of 2019

Dated.- October 1, 2019

MS HARSHA DEVANI AND MS SANGEETA K. VISHEN, JJ.

For The Petitioner (s) : MR VARIS V ISANI (3858)

For The Respondent (s) : MS MAITHILI MEHTA, ASSISTANT GOVERNMENT PLEADER

ORAL ORDER

(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)

1. By this petition, the petitioner seeks a direction to the respondent authorities to forthwith withdraw bank attachment made on the IDBI Bank Limited, Prahladnagar Branch, Ahmedabad and Current Account No.1024102000009874, release of godown/office and to unblock credit under section 83 of the Central Goods and Services Tax Act, 2017.

2. Since the order of attachment of the bank account as well as godown/office and blocking of credit were not placed on record and were not made available to the petitioner, this court has perused the original file produced by the learned Assistant Government Pleader for the perusal of this court.

3. Upon a query raised by the court, the learned Assistant Government Pleader, under instructions, has stated before this court that the order of attachment under section 83 of the CGST Act attaching the bank account of the petitioner has not been communicated to the petitioner. Upon perusal of the order of attachment dated 3.8.2019 issued under section 83 of the CGST Act, it is found that the same has been issued by the Assistant Commissioner of State Tax, Unit-21, Ahmedabad in respect of proceedings launched against the petitioner under section 83 of the CGST Act.

4. Section 83 of the CGST Act provides for provisional attachment to protect revenue in certain cases and lays down that 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. Thus, section 83 of the CGST Act empowers provisional attachment of property, subject to pendency of the proceedings under sections 62, 63, 64, 67, 73 or 74 of the CGST Act. The same does not contemplate, and rightfully so, provisional attachment pending any proceeding under section 83 of the CGST Act, inasmuch as, there can never be any proceeding pending under section 83 of the CGST Act as the same only empowers the State authorities to provisionally attach the property of a taxable person, subject to the provisions of section 83 being satisfied.

5. Under the circumstances, it appears that the exercise of powers under section 83 of the CGST Act, whereby the bank account of the petitioner has been attached is totally without any authority of law.

6. Insofar as blocking of the credit of ₹ 6,63,51,380/- available in the electronic credit ledger of the petitioner on 1.8.2019 by the respondent authorities by making computer entry is concerned, upon a query by the court, the learned Assistant Government Pleader even with the assistance of the instructing officer is not in a position to point out any provision of law which empowers the respondent authorities to block the credit.

7. Insofar as the attachment of godown/office is concerned, the learned Assistant Government Pleader has submitted that the respondents would open the seal.

8. Having regard to the fact that the order of attachment of bank account is prima facie without authority of law, as discussed hereinabove, and the order of blocking of credit is not backed by any statutory provision, the respondents are directed to forthwith withdraw the attachment of the bank account of the petitioner with the IDBI Bank, Prahladnagar Branch bearing Current Account No. 1024102000009874 and to unblock the credit of ₹ 6,63,51,380/- available in the electronic credit ledger forthwith.

9. Stand over to 17th October, 2019. Direct service is permitted today.

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