Order Date – 13 October 2023

Parties: M/s Dholagiri Enterprises Vs Commissioner, CGST, Pkl and anr.

Facts –

• The Petitioner, M/s Dholagiri Enterprises, was subjected to an inquiry initiated by the Superintendent Anti Evasion, CGST. The Bank Account of the petitioner was provisionally attached under section 83 of the Act vide order dated 10.03.2021/12.03.2021and the petitioner filed its objections on 19.03.2021.
• The respondent decided the objections filed by the petitioner, vide speaking order dated 10.01.2022 and issued DRC-23 dated 10.01.2022 to Banker of the petitioner for restoration of Bank account of the petitioner. Vide order dated 11.01.2022, the bank account of the petitioner was again provisionally attached by respondent under Section 83 of the Act.
• Thereafter, respondent No. 2 issued letter dated 07.03.2023 with respect to intimation of liability under Section 122 read with Section 127 of CGST Act, 2017 in terms of circular dated 06.07.2022. Penalty was imposed upon the petitioner for availing and passing on ITC on the basis of goodsless invoices. A show cause notice was also issued on 11.04.2023 (P-3) against the petitioner.

Issue –

• Whether the provisional attachement of Bank account is valid and proper?

Order –

• The Divisional Bench of Hon’ble High Court observed that once the proceedings were initiated under Section 67 of the Act, which falls under Chapter XIV of the Act, there is no infirmity in the provisional attachment of the bank account which will remain in force for a period of one year. 
• The show cause notice is pending before the proper officer/adjudicating authority, therefore, in the interest of safeguarding the interest of the Government revenue, it is imperative that the Bank account of the petitioner remains provisionally attached till the adjudication of the case and thereafter, till the realization of the confirmed Government dues.
• In the present case after the search was conducted on 08.01.2021 under Section 67 of CGST Act and thereafter bank account of the petitioner was attached under Section 83 of the Act, the power of attachment can be exercised on initiation of any proceedings under Chapter XII, XIV or XV. Since the proceedings were initiated under Section 67 of CGST Act, this procedure falls under Chapter XIV. Hence, even after amendment of Section 83 (1) of the CGST Act w.e.f 01.01.2022, the power of attachment can be exercised on initiation of any proceedings under Chapter XV, which has been done in the present case.
• In the present case, the show cause notice was issued after initiation of proceedings under Section 67 of the Act and these proceedings falls under Chapter XV and, thus, there is no infirmity in attachment of the bank account of the petitioner, which would be enforced for a period of one year.
• The writ petition is dismissed being devoid of any merit.