The court confirmed that provisional attachment of assets under the CGST Act is valid only when initiated proceedings comply with specified statutory chapters.

JUDGMENT

Ritu Bahri, J.

The petitioner-assesee has approached this Court by filing the present writ petition for issuance of writ in the nature of certiorari for quashing order dated 20.01.2023 (P-1) and show cause notice dated 11.04.2023 (P-3)

2. The facts as stated in the petition are that search operations were carried out against the petitioner on 08.01.2021 by various teams of CGST under section 67 of CGST Act. An inquiry was initiated against the petitioner by Superintendent Anti Evasion, CGST, Panchkula under section 70 of CGST Act. The Bank Account of the petitioner was provisionally attached under section 83 of the Act by respondent no 1, vide order dated 10.03.2021/12.03.2021 and the petitioner filed its objections on 19.03.2021 against provisional attachment, under rule 159(5) of CGST Rules, 2017 which were not decided by respondent no 1.

3. Petitioner approached this Court by filing CWP No. 21916-2021and vide order dated 23.11.2021, this Court called the explanation of respondent No. 1 for not deciding the objections for more than 08 months. Respondent No. 1 was also directed to decide objections by passing a speaking order before next date of hearing. Thereafter, respondent No. 1 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 No. 1 under Section 83 of the Act. The petitioner challenged this order by filing CWP No. 941-2022.

4. In the meantime, CWP No. 21916-2021 came up for hearing on 20.02.2023 and the petition was dismissed as having been rendered infructuous. Thereafter, when CWP No. 941-2022 came up for hearing before this Court, learned counsel for the respondent has handed over a copy of impugned order dated 20.01.2023 ordering provisional attachment of the bank account of the petitioner.

5. Thereafter, respondent No. 2 issued letter dated 07.03.2023 (P-2) 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. A penalty amounting to Rs.25,77,96,424/- under Section 122 (1) (ii) and penalty amounting to Rs.24,94,11,453/- under Section 122 (1) (vii) 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. Hence the present writ petition.

6. Learned senior counsel for the petitioner has argued that at the time of search on 08.01.2021 under Section 67 of CGST Act, the proceedings of enquiry initiated under Section 70 of the Act did not conclude. She has further argued that Section 83 (1) of the CGST Act which was amended w.e.f 01.01.2022 stipulates that power of attachment can be exercised on initiation of any proceedings under Chapter XII, XIV or XV. The Commissioner may in order to protect the interest of the Government revenue, can attach provisionally any property including bank account belonging to the taxable person or any person specified in sub Section (1A) of Section 122 . She has argued that for invoking fifth part of Section 83 against any person specified therein, the conditions specified under first part of Section 83 must be fulfilled which has not been done in the present case.

7. She has further argued that proceedings initiated under Section 122 read with Section 127 did not fall under Chapter XII, XIV or XV and hence the attachment of the bank account is against the amended provi