JUDGMENT :

HARSHA DEVANI, J.

1. By this petition under article 226 of the Constitution of India, the petitioners have challenged the provisional attachment orders dated 18.10.2019 passed under section 83 of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter collectively referred to as the “GST Acts”) provisionally attaching the bank accounts of the petitioners. The petitioners seek a further direction to the respondents to forthwith release the provisional attachment of other bank accounts of the petitioners copies of which have not been served upon the petitioners.

2. The petitioners are engaged in the manufacture and sale of paper and paper waste since the year 2000 and are also engaged in trading various commodities. The petitioners are listed with Bombay Stock Exchange and are duly registered under the GST Acts. According to the petitioners, they duly file returns and discharge tax liability under the GST Acts.

3. It is the case of the petitioners that they entered into certain transactions of sale of goods on “as is where is” basis in the year 2017-18. The goods were purchased from registered persons under the GST Acts on payment of tax under the GST Acts and they were in turn sold to other registered persons. Input tax credit was claimed of tax paid on purchases which was utilized towards payment of output tax liability and the differential tax amount was paid through electronic cash ledger.

4. On 27.9.2018, search proceedings came to be conducted by the Central Goods and Services Tax Department at the premises of the petitioners. An inquiry was made regarding the trading transactions of the petitioners and evidence was demanded regarding the purchase and sale transactions. The petitioners intimated that the goods were sold on “as is where is” basis and thus, there was no evidence of movement of goods; however, the fact is that the goods were purchased from registered vendors. It is further the case of the petitioners that it was not in dispute that the said vendors had deposited the tax amount into the Government treasury which was duly reflected in Form GSTR-2A on the online portal. According to the petitioners, it was also not disputed that the petitioners deposited the differential amount of tax into the Government treasury on further supply of such goods.

5. Subsequently, summonses were issued to the second petitioner in the months of October and November, 2018. The second petitioner duly attended to such summons and his statement was recorded. A notice dated 17.12.2018 came to be issued to the petitioners calling for documents in relation to the investigation. The petitioners responded to such notice by a letter dated 22.1.2019 and the documents as required by the respondents were furnished. The petitioners reiterated that there was no evasion of tax under the GST Acts by them. After such correspondence, the respondents visited the premises again on 1.4.2019 for scrutiny of the same transactions. After verification, the second petitioner was called to the Commissionerate in the evening on the same day. When the second petitioner went as directed, he was issued an arrest memo under section 69 under the GST Acts and was thereafter immediately arrested.

6. The second petitioner thereafter applied for bail which was ultimately granted under section 167(2) of the Code of Criminal Procedure, 1973.

7. It is the case of the petitioners that after the arrest of the second petitioner on 1.4.2019, no notice had been issued to the petitioners with regard to the issue in question and no show-cause notice had been issued under section 73 or 74 of the GST Acts. It is the further case of the petitioners that despite the fact that no proceedings were pending under sections 62, 63, 64, 67, 73 or 74 of the GST Acts, the second respondent proceeded to provisionally attach the bank accounts of the petitioners in exercise of powers under section 83 of the GST Acts. According to the petitioners