Bharat Parihar, Kishan Lal Bunkar, Sunbright Designers Pvt. Ltd. Vs State of Maharashtra Thr. Pp Office and Ors.

The Bombay High Court has held that it is within the jurisdiction of the Commissioner U/s 83 to take action against any person, even if located outside their territorial jurisdiction, as long as they are a beneficiary of a transaction involving tax evasion or violation of the Act.

The Bombay High Court further held that attachment of Bank accounts U/s 83 ceases after 1 year when there are no new facts. In a common order the High Court disposed of 3 writs. 21-Apr-2022: Provisional attachment order was passed attaching bank account with Yes Bank Mumbai. 19-Apr-2023: A new communication was send to Bank further continuing the provisional attachment.

Petitioners challenged the same through Writs. Department opposed the entertainment of Writ stating that attachment of Bank Account is Appealable Order U/s 107. Petitioners opposed such view considering the judgement of Supreme Court in Radha Krishna Industries. Bombay High Court rightly agreed with the Petitioner’s view and followed the wisdom of Supreme Court. 

My View: I wonder why the Department Counsel took contrary position to the Supreme Court Judgement. When the Judgement in Radha Krishna Industries is clear then also Dept. wants to go against it. This is shocking.

this petition challenges provisional attachment of bank account of the petitionerwith yes bank, mumbai, under section 83 of the cgst act, 2017 and furthercommunication dated 19th april 2023, whereby the provisional attachment madeon 21st april 2022 is retained under section 83 of the cgst act. the petition isfiled after the objections of the petitioner to provisional attachment weredisposed of under rule 159 (5) of the cgst rules by the respondents. 2. we have heard learned counsel for the petitioner and learned counsel for therespondents. 3. at the outset, the respondents have raised a preliminary ground that the orderdisposing off objections under rule 159 (5) of cgst rules attaching the bankaccount provisionally is an appealable order and, therefore, this court should notentertain the petition. the respondents have relied on section 107 of the act insupport of the contention that the same is an appealable order. on the other hand,the petitioner relied upon the decision of the supreme court in the case of radha krishan industries vs. state of himachal pradesh (2021) 6 supremecourt cases 771 , wherein an identical submission was made before the supremecourt and the supreme court in paragraphs 63 to 66 have held that orderdisposing the objections to provisional attachment of bank account is not anappealable order and the only remedy that is available is in the form of theinvocation of the writ jurisdiction under article 226 of the constitution of india.the respondents cannot take a position contrary to the decision of the supremecourt. thus, the objection as to alternative remedy being no more res integraand concluded by the decision of the supreme court in the case of radhakrishan industries (supra), the present writ petition needs to be entertained. wenow propose to deal with the provisions relating to attachment under section 8 3of the cgst act. 4. section 83 of the cgst act reads as under:- “(1) where during the pendency of any proceedings under section 62 or section63 or section 64 or section 67 or section 73 or section 74 , the commissioner isof the opinion that for the purpose of protecting the interest of the governmentrevenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in suchmanner as may be prescribed. (2) every such provisional attachment shall cease to have effect after the expiryof a period of one year from the date of the order made under sub-section (1).” 5. section 83 (2) provides that provisional attachment made under sub-section (1)of section 83 shall cease to have effect after the expiry of a period of “one year”from the date of the order made under sub-section (1). in the instant case, theprovisional attachment order was made on 21st april 2022 and period of oneyear from the said date expired on 21st april 2023. therefore, in our view, theprovisional attachment order dated 21st april 2022 ceases to have effect byoperation of law and cannot continue to operate after 21st april 2023. in the caseof guru nanak motor house vs. union of india 2021-tiol-2017-hc-mum-gst , this court, after examining the provisions of section 83 , has taken asimilar view wherein it was held that after the expiry of period of one year, theprovisional attachment ceases to exist. 6. in so far as continuation of the provisional attachment by the respondent’sletter dated 19th april 2023 is concerned, it is submitted by learned counsel forthe respondents that the said letter is only a communication to the bankers witha copy marked to the petitioner. learned counsel for the respondents stated thata copy of fresh order is passed, which is noted on the order sheet a copy ofwhich is annexed to the reply of the respondents. it is the contention of therespondents as a fresh order is passed provisionally attaching the petitioner’sbank account, hence, the provisional attachment of the petitioner’s account asinformed in the communication dated 19th april 2023, is valid. learned counselfor the respondents has relied on the decision of the gujarat high court in thecase of shrimati priti amrutlal gandhi vs. state of gujarat 2011 scc onlineguj 1869., in support of her contention that since the fresh attachment order ispassed, the same is valid. 7. we have perused the said order sheet referred to by the respondents. theorder sheet records the date of the noting as 21st april 2022, wherein afternarrating the facts it is stated that same is submitted for necessary orders under section 83 of the mgst act. it further states that “we may consider takingaction of provisional attachment under section 83 in respect of this bank accountand, thereafter, the joint commissioner (investigation) has opined that this bankaccount is required to be attached. the said order sheet is dated 21st april 2022and formed the basis for issue of first provisional attachment on 21st april 2022and which, as observed above, has ceased to expire by operation of sub-section(2) of section 83. 8. thus, we do not find any fresh order having being passed by the respondentsto attach the bank account on 19th april 2023. in any view of the matter, merenotings in the file of the concerned officer cannot constitute an order without aformal order as the law may mandate being passed and most importantly suchorder being communicated to the affected person, whose bank account isattached. the respondents have not shown that such order was passed andserved on the petitioner much less prior to the provisional attachment orderceasing to operate by virtue of the provisions of section 83 (2) and/or thecommunication dated on 19th april 2023. in any case, the respondents havealso not disputed that letter of 19th april 2023 is only a communication to thebank, to retain provisional attachment of the account. thus, it can never be afresh order under section 83 (1) provisionally attaching the petitioner’s bank account. in these circumstances, it is clear that after 21st april 2023 there is noprovisional attachment of the petitioner’s bank account, looked from any angle. assist the revenue as much as in that case a fresh order was passed fo rpro visional attachment. in the instant case, as observed, there is no fresh order in question after 21st april 2023 attaching the bank account. 10. in the light of the above discussion, it is held that the communication dated21st april 2022 (exhibit “b” to the petition) provisionally attaching the petitioner’s bank account is rendered illegal and invalid by virtue of the provisions of section 83 (2) of the cgst act. the extension of the provisiona latta chment by communication dated 19th april 2023 (exhibit “g-1” to thepetition) is hereby quashed and set aside. parties, including the bank, to act onauthenticated copy of this order. 11. the writ petition stands allowed in the aforesaid terms. no order as to costs.

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