HC set asides provisional bank attachment order, citing serious intrusion into private space

The Petitioner had filed a Writ before the Bombay HC against provisional back attachment order. The Petitioner contended that, no notice of proceedings u/s. 67 of the CGST Act was served upon them and there were no proceedings pending against them. 

It was observed by the HC observed that Section 83 of the CGST Act inter alia conditions the powers to provisionally attach bank account as follows:

• Pendency of any proceedings under sections 62 or 63 or 64 or 67 or 73 or 74;
• The proper officer shall be of the opinion that it is necessary to provisionally attach any property including bank account belonging to the taxable person and thereby exercise his powers by making an order in writing.

It was further observed by the HC that the pending proceedings should be relatable to the assessee whose property is being provisionally attached. However, in the instant case, the Petitioner was nowhere linked with the assessee. The HC also observed that the provisional attachment can be carried out by Commissioner of State Tax upon fulfilment of preconditions, however, in the instant case, there was no such specific authorization given by the Commissioner to the Joint Commissioner who had issued order for provisional attachment. In view of the above observations, the HC quashed the provisional bank attachment order.

Praful Nanji Satra vs. State of Maharashtra [W.P. (L) No. 5182 of 2020]

GLS Comments: 

Section 83 of the CGST Act clearly specifies the conditions for provisional attachment of bank accounts of the taxpayers. However, it has been lately seen that the Revenue authorities, more often than not, arbitrarily order for bank account attachments. It would be pertinent to note that the Bombay HC in the case of Gehna Trading LLP Vs Union of India [Writ Petition No. 167 of 2020] had held that when a specific proceeding is carried against one taxable person, the Bank Account of another taxable person cannot be provisionally attached.

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