Order date – 29 March 2023

Parties – Sakshi Bahl & Anr. Vs The Principal Additional Director General

Facts –

• The Petitioner, SAKSHI BAHL & ANR., challenges the provisional attachment of their savings bank accounts through an order dated 06.02.2023.
• The respondent alleged that during the investigation of fake firms involved in passing off fake Input Tax Credit, and the statement of Shri Kamal Kumar regarding the operation of the bank account of M/s Shankar/Shankar Trading Company.
• The respondent was of the view that the funds lying in the account of the petitioners belonged to the partners of M/s Hindustan Paper Machinery Industry and, therefore, had proceeded to attach their bank accounts.

Issue –

• Whether the impugned order of the Court sustainable?

Order –

• The Court finds that the impugned order cannot be sustained as the power to provisionally attach assets or bank accounts is limited to attaching those of taxable persons and persons specified under Section 122(1A) of the Act.
• The court emphasizes that the exercise of power under Section 83 of the Act must be confined within the limits of the provision and that the attachment of bank accounts is a draconian step that can only be taken if the conditions specified in Section 83 of the Act are fully satisfied.
• The attachment of bank accounts is a draconian step and such action can only be taken in case conditions specified in Section 83 of the Act, are fully satisfied.  The exercise of power under Section 83 of the Act must necessarily be confined within the limits of the aforesaid provision.
• The court allows the petition and sets aside the order insofar as it attaches the petitioners' bank accounts.