Vimal Yashwantgiri Goswami VS State Of Gujarat

The Rule is returnable forthwith. Mr. Utkarsh Sharma, acting as the AGP, has waived the service of notice of the rule on behalf of respondent no.1, while Mr. Amar Bhatt, representing respondent no.4, has also waived service. A draft amendment has been permitted, with instructions for it to be carried out promptly.

The petitioner is registered with the GST authority, with its registered address as stated in the cause-title. The second respondent, along with other officials of GGST, conducted a raid on the petitioner’s residential premises on July 19, 2019. This raid was related to an investigation into Heugo Metal.

Furthermore, respondent no.2 sealed a drawer containing files, diary, mobile, and laptop during the raid, instructing the writ-applicant to provide further details. Subsequently, on July 23, 2019, respondent no.2 and other officials revisited the petitioner’s premises, conducting search actions and issuing summons under Section-70(1) of the CGST and GGST Acts. Respondent no.2 also provisionally attached the petitioner’s current and savings accounts maintained with ICICI Bank on the same day, exercising power under Section-83 of the CGST Act.

The petitioner, aggrieved by these actions, filed a petition challenging the orders of provisional attachment and the action taken under Rule-86A of the Rules. They invoked the extraordinary writ jurisdiction under Article 226 of the Constitution of India to approach the court.

During the proceedings, Mr. Chetan Pandya represented the writ-applicant, while Mr. Utkarsh Sharma appeared for the respondent State, and Mr. Amar Bhatt, along with Mr. Kunal Vaishya, represented respondent no.4.

Section 83 of the CGST Act empowers the Commissioner to provisionally attach any property, including bank accounts, belonging to a taxable person if it’s deemed necessary to protect the interests of government revenue during pending proceedings under specific sections of the Act. Such provisional attachments cease after one year from the date of the order. Rule 86A of the CGST Rules outlines conditions for the use of the amount available in the electronic credit ledger. It authorizes the Commissioner or an authorized officer to withhold input tax credit if there are reasons to believe it has been fraudulently availed or is ineligible.

In the case at hand, respondent no.2, acting under Section 83 of the CGST Act, provisionally attached the petitioner’s bank accounts on July 23, 2019, during ongoing proceedings. This action was taken to safeguard government revenue. Additionally, respondent no.2 had previously conducted a raid on the petitioner’s premises, sealing a drawer containing various items and issuing summons under Section 70(1) of the CGST and GGST Acts. These actions were part of an investigation into potential tax-related issues.

The orders of provisional attachment being contested in this case were issued on July 23, 2019. According to Section 83 of the CGST Act, such provisional attachments cease to have effect after one year from the date of the order. Similarly, Rule 86A of the CGST Rules, 2017, which deals with the conditions for the use of the amount available in the electronic credit ledger, also stipulates that any restrictions imposed under this rule cease after one year from the date of imposition.

Given that the orders in question were issued on July 23, 2019, they would cease to be valid after one year. Therefore, it can be argued that the statutory right to maintain these provisional attachments has expired. This legal standpoint suggests that the contested orders may no longer be enforceable, as they have outlived their statutory validity.

Exactly, the orders of provisional attachment issued on July 23, 2019, have surpassed their statutory validity according to both Section 83 of the CGST Act and Rule 86A of the CGST Rules, 2017. Therefore, any subsequent orders of attachment, such as those dated July 24, 2020, and July 27, 2020, as mentioned in the draft amendment, would also be considered invalid due to having exceeded their statutory lifespan. As of now, there are no valid orders of attachment concerning the petitioner’s current accounts or Input Tax Credit.

Additionally, the user mentioned Section 67(7) of the Act, which states that if goods are seized under certain circumstances and no notice is given within six months, the goods must be returned to the person from whom they were seized. This provision could be relevant if the petitioner’s laptop and mobile phone were seized by the authorities without proper notice within the specified timeframe.

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