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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J.
Proex Fashion Private Limited - Appellant
Versus
Government Of India & Ors - Respondent
Writ Petition (Civil) No. 11245 of 2020; Civil Miscellaneous Application No. 35053 of 2020
Decided On : 06-01-2021
Section 83 - Bank Account Attachment - 67, 71, 83 - The court discussed the provisions of Section 83 of the Central Goods and Services Tax Act, 2017 and its scope, as well as the statutory preconditions for exercising the power of attachment. The court highlighted the need for strict compliance with the statutory power and emphasized that the power to attach the bank account must be exercised only in specific circumstances as provided by the law. The court referred to the judgments of the Bombay High Court, Punjab and Haryana High Court, and Gujarat High Court to support its interpretation of Section 83.
Fact of the Case:
The petitioner sought to challenge the attachment of their bank account by the respondent under Section 83 of the Central Goods and Services Tax Act, 2017. The respondent initiated proceedings against the petitioner under Section 71 of the Act, and the bank account attachment was pursuant to those proceedings.
Finding of the Court:
The court found that the impugned order of bank account attachment under Section 83 cannot be sustained as no proceedings under the relevant provisions mentioned in Section 83 were initiated against the petitioner. The court quashed the impugned order but allowed the respondents to take lawful action in accordance with the conditions of Section 83.
Issues: The main issue was the legality of the bank account attachment under Section 83 without the initiation of proceedings under the relevant provisions mentioned in Section 83.
Ratio Decidendi: The court held that the power to attach the bank account must be exercised only in strict compliance with the statutory power and cannot be extended to cover situations not expressly contemplated by the section. Absent the statutory precondition for exercise of the power of attachment, any order under Section 83 is wholly illegal and unsustainable.
Final Decision: The impugned order of bank account attachment under Section 83 was quashed, but the respondents were allowed to take lawful action in accordance with the conditions of that Section.
JUDGMENT
Prateek Jalan, J. - The proceedings in the matter have been conducted through video conferencing.
1. By way of the present petition, the petitioner seeks to challenge a communication dated 25.11.2020/01.12.2020 (Annexure-9 to the writ petition), by which the bank account of the petitioner in the respondent no.3-Bank ("the Bank") has been attached by respondent no. 2, purportedly under Section 83 of the Central Goods and Services Tax Act, 2017 ("the Act").
2. The contention of Mr. Govind Rishi, learned counsel for the petitioner, is that the respondent authorities have taken action against the petitioner under Section 83 of the Act, pursuant to proceedings initiated under Section 71 of the Act, whereas Section 83 of the Act, on its terms, cannot be invoked in such a situation.
3. By an order passed on 30.12.2020, notice was issued to the respondents and they were directed to file a counter affidavit. Although time was extended for the said purpose yesterday, Mr. Harpreet Singh, learned counsel for respondent no.2, states that the counter affidavit has been filed only this morning and is thus not on record. However, a copy of the counter affidavit has been supplied to learned counsel for the petitioner and has also been made available to me electronically. Mr. Singh is directed to ensure that the counter affidavit is brought on record during the course of the day.
4. The relevant provisions of the Act are set out below:
"67. Power of inspection, search and seizure - (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that--
(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or
(b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.
(3) The documents, books or things referred to in sub- section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.
(4) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to brea
, time can be extended for a further period of six month. Appropriate order for extension of period of provisional attachment would only be passed upon satisfaction of the criteria listed out. An inj....
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