The court upheld the provisional attachment under Section 83(1) of the CGST Act, affirming that the order protects government revenue regardless of whether the issue is a question of law or fact.

1. The petitioner has filed the present petition impugning the order dated 25.06.2024 (hereafter the impugned order) passed by respondent no.1, whereby the order dated 10.05.2024 passed under Section 83 (1) of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act)/ Delhi Goods and Services Tax Act, 2017 (hereafter the DGST Act), provisionally attaching the petitioner’s four bank accounts maintained with the ICICI Bank, was upheld.

2. The petitioner had filed an objection on 20.05.2024 to the provisional attachment order dated 10.05.2024 under Rule 159 (5) of the Central Goods and Services Tax Rules, 2017 (hereafter the CGST Rules), which was rejected by the impugned order.

3. The impugned order indicates that the petitioner was operating a night club under the name ‘PRIVEE’ at Shangri-La, Eros Hotel, New Delhi. And, specific intelligence was received and developed which indicated that the petitioner was evading taxes. It is alleged that the petitioner was not disclosing the actual sale of liquor in its GST returns.

4. On 07.03.2024, the Anti-Evasion branch of the respondents conducted a search at the petitioner’s principal place of business pursuant to an authorization for search issued under Section 67 (2) of the CGST Act. It is alleged that during the search, it was found that the petitioner was using a POS machine for recording its daily sales. It is alleged that the data retrieved from the POS machine indicate that the petitioner had suppressed the sale value of liquor. The statement of one of the constituent partners of the petitioner firm was also recorded under Section 70 of the CGST Act. He is alleged to have stated that he is a dummy partner and the actual beneficiaries of the firm were two other persons. He is also alleged to have accepted that the total sale of liquor as per the data available in the POS machine amounted to ₹66,69,81,943/- and VAT amounting to ₹16,10,40,710/- was charged during the period June, 2019 to March, 2024 (till 07.03.2024). It is alleged that the said statement is correct and substantiates the allegation that the sale value of liquor, as disclosed, was substantially less than the actual value.

5. According to the respondents (mentioned in the impugned order), the primary GST liability as computed is approximately ₹4.7 Crores.

6. In the aforesaid circumstances, the competent officer came to the conclusion that it is necessary to secure the government revenue, pending conclusion of the proceedings. There was only ₹26,96,726/- in the petitioner’s bank account and therefore, the same was provisionally attached, in exercise of powers under Section 83 (1) of the CGST Act/DGST Act.

7. Learned counsel appearing for the petitioner has assailed the impugned order, essentially, on two grounds: First, he submits that the impugned order passed under Section 83 (1) of the CGST Act/DGST Act indicates that the proceedings under Section 67 of the CGST Act/DGST Act had commenced and had formed the basis of the said order. He contends that the said proceedings have since culminated in a Show Cause Notice dated 31.07.2024 (hereafter the SCN) under Section 74 of the CGST Act /DGST Act for the relevant period. He submitted that the powers under Section 83 (1) of the CGST Act/DGST Act could be exercised only once the proceedings have commenced. According to him, this would imply that once the proceedings mentioned in the order under Section 83 (1) of the CGST Act/DGST Act are concluded, the order of provisional attachmen