Order date – 29 August 2022

Facts – 

• The Petitioner’s, Varun Gupta proprietor of M/s. S G Plastic Industries, bank account was attached under Section 83 of the CGST Act, 2017 by order dated 22.10.2021, passed by the respondent.
• Against the same, the petitioner filed a writ petition which was allowed by order dated 11.05.2022 on the ground that no proceeding under Section 74 of CGST was pending as on the date of attachment. It was further observed that amended provisions of Section 83 of the CGST Act were not available when the attachment order was passed.
• Consequently, the respondent has passed the order dated 19.05.2022 regarding provisional attachment of property under section 83 of CGST Act, 2017 in order to protect the interests of revenue.
• Aggrieved, the petitioner filed a writ petition.

Issue – 

• Whether the provisional attachment of the bank accounts of the petitioner is justifiable?

Order – 

• The Court observed that Section 83 of the CGST Act leaves no manner of doubt that firstly, there is necessity of the formation of opinion by the Commissioner; secondly, the opinion must be formed before ordering a provisional attachment; thirdly, the opinion must indicate that it is necessary so to do for the purpose of protecting the interest of the government revenue; fourthly, the order must be in writing for the attachment of any property of the taxable person; and fifthly, observance of the Rules by the Commissioner in regard to the manner of attachment.
• In the present case it is observed that there is no proceeding under Section 74 of the C.G.S.T. Act has yet been initiated.
• The respondent while passing the impugned order, has neither recorded his opinion nor referred to any tangible material which necessitated him to pass the impugned provisional attachment order so as to protect the interest of the Government revenue.
• Also, despite the earlier order having been quashed by this Court, the respondent has chosen to pass the impugned order on the very next day of withdrawing the earlier order. Therefore, order passed is in a most arbitrary and illegal manner and in complete disregard of provisions of Section 83 of the C.G.S.T. Act read with Rule 159 of the C.G.S.T. Rules 2017 and the law laid down by Hon’ble Supreme Court in the case of Radha Krishan Industries Vs. State of Himachal Pradesh and others.
• Therefore, the impugned order cannot be sustained. Writ petition allowed.