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IN THE HIGH COURT OF CALCUTTA
Shekhar B Saraf, J.
M/s. Amazonite Steel Pvt. Ltd. & Anr. - Appellant
Versus
Union Of India & Ors. - Respondent
Writ Petition No. 18429 of 2019, 18431 of 2019, 18433 of 2019, 21272 of 2019, 21273 of 2019, 21274 of 2019
Decided On : 04-03-2020
GST ACT - PROVISIONAL ATTACHMENT - COMPETENCY OF OFFICERS - VALIDITY OF ORDER BEYOND ONE YEAR - FRESH ORDERS - INTERPRETATION - [SECTION 83] - The Calcutta High Court, while deciding the legality of provisional attachment orders passed under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act), held that the Principal Additional Director General and Additional Director General of the Directorate General of Goods and Services Tax Intelligence (DGGI) are competent authorities to pass such orders. The Court interpreted Section 83(2) and held that a provisional attachment order ceases to have effect after one year from the date of the order, but the authorities can issue fresh orders if the conditions under Section 83(1) are met. However, the Court emphasized that issuing fresh orders requires a fresh review and assessment of circumstances, and it should not be done merely as an extension of the earlier order.
Fact of the Case:
The writ petitions challenged the provisional attachment of the petitioners' current bank accounts by the DGGI under Section 83 of the CGST Act. The petitioners contended that the orders were passed by incompetent authorities, remained valid beyond one year, and that fresh orders could not be issued. The Revenue argued that the officers were competent, the orders were valid for one year, and fresh orders could be issued.
Finding of the Court:
1. The Court held that the Principal Additional Director General and Additional Director General of DGGI are competent authorities to pass orders under Section 83 of the CGST Act. 2. The Court interpreted Section 83(2) and held that a provisional attachment order ceases to have effect after one year from the date of the order, but the authorities can issue fresh orders if the conditions under Section 83(1) are met. However, the Court emphasized that issuing fresh orders requires a fresh review and assessment of circumstances, and it should not be done merely as an extension of the earlier order.
Issues: 1. Whether the Principal Additional Director General and Additional Director General of DGGI are competent to pass orders under Section 83 of the CGST Act, 2017? 2. Whether an order passed under Section 83 of the CGST Act, 2017, remains valid after the expiry of one year from the date of the order? 3. Whether the authorities can issue fresh order of provisional attachment/multiple orders under Section 83 of the CGST Act, 2017?
Ratio Decidendi: 1. The Court relied on Sections 2(24), 3, and 5 of the CGST Act to conclude that the Principal Additional Director General and Additional Director General of DGGI are equivalent to the Principal Commissioner of Central Tax and Commissioner of Central Tax, respectively, and thus have the power to pass orders under Section 83. 2. The Court interpreted Section 83(2) and held that the provisional attachment order ceases to have effect after one year from the date of the order. However, the Court also held that fresh orders can be issued if the conditions under Section 83(1) are met. The Court emphasized that issuing fresh orders requires a fresh review and assessment of circumstances, and it should not be done merely as an extension of the earlier order.
Final Decision: All the writ petitions were disposed of. The Court directed the respondent authorities to pay costs of Rs. 5 lakhs to each of the three petitioners for continuing with the provisional attachment beyond the period of one year.
JUDGMENT
Shekhar B. Saraf, J. - The grievances raised and issues involved in all the six writ petitions are common, and accordingly they were heard together and are being decided conjointly. This is an application under Article 226 of the Constitution of India wherein the writ petitioners are aggrieved by the orders passed by the Directorate General of Goods and Services Tax Intelligence, Kolkata Zonal Unit [hereinafter referred to as "DGGI"], to provisionally attach the current bank accounts of the writ petitioner under Section 83 of the Central Goods and Services Tax Act, 2017.
2. For the purpose of convenience, the facts in writ petition W.P. No. 21272(W) of 2019 are being taken into consideration and are chronologically delineated hereinbelow:
a. The writ petitioner no. 1 is a private limited company duly incorporated under the Companies Act, 2013, under the name of Amazonite Steels Private Limited [hereinafter referred to as the "said company"] whereas petitioner no. 2 is the director of the said company. The said company is duly registered under the Central Goods and Services Tax Act, 2017 [hereinafter referred to as "CGST Act, 2017"] and West Bengal Goods and Services Tax Act, 2017, having its registration number as 19AAPCA2903C1ZW.
b. The said company carries on its business transactions through the current account registered with M/s. Lakshmi Vilas Bank, New Alipur Branch [hereinafter referred to as the "said bank"] having account no. 0125360000002129 [hereinafter referred to as the "said account"].
c. On 5th June, 2018, the Additional Director General, Directorate General of Goods & Services Tax Intelligence (hereinafter referred "ADGGI") passed an Order to provisionally attach the current account of the writ petitioner maintained in the said bank under Section 83 of the CGST Act, 2017, through FORM GST DRC - 22 [hereinafter referred to as the "said first Order"]. The said first Order of the ADGGI was addressed to the Branch Manager of the said bank in order to freeze the functioning of the said account of the petitioners. The relevant extract of the said Order is delineated below:
"It is to inform that M/s. Amazonite Steels Pvt. Ltd. having principal place of business at 23 MSBK Mitra Road, Baranagar, Kolkata-700036 bearing GST registration number as 19AAPCA2903C1ZW, PAN- AAPCA2903C is a registered taxable entity under the CGST Act, 2017. Proceedings have been launched against the aforesaid taxable person under Section 67 of the said Act to determine the tax or any other amount due from the said entity. As per information available with the department, it has come to my notice that the said entity has the following bank account at your bank.
Name as per the Account:- Amazonite Steels Pvt. Ltd.
Account No:- 0125360000002129
In order to protect the interests of the revenue and in exercise of the powers conferred under Section 83 of the Act, I, Ataur Rahman, Additional Director General, hereby provisionally attach the aforesaid account.
No debit shall be allowed to be made from the said account or any other account operated by the aforesaid entity on the same PAN without the prior permission of this department."
d. The said bank through a letter dated 11th June, 2018, informed the writ petitioner about the Order passed by the ADGGI which directed the bank to freeze the current account of the petitioners.
e. After more than a year, on 19th July, 2019, the said company by way of a letter made representation before the ADGGI, requesting to de-freeze the current account of the company which was earlier provisionally attached under Section 83 of the CGST Act, 2017.
f. The petitioner company on 20th July, 2019 informed the said bank regarding the appointment of new directors in the company, which was duly acknowledged by the said bank.
g. On 31st July, 2019, the petitioner company wrote to the said bank praying for immediate de-freezing of the said account. The relevant portion of the letter is delineated below:
"In this conn
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