Court Orders Release of Bank Account Attachment and Credit Unblock under CGST Act

The Court issued a Notice directing the respondents to release the attachment of the petitioner's bank account and unblock the petitioner's credit in the electronic ledger. This interim relief was granted based on the petitioner's argument that the respondents lacked statutory authority to block tax credit and that the provisional attachments were unauthorized under the CGST Act. The assessment order indicated that once assessment is completed, the attachment under section 83 of the CGST Act should cease, supporting the Court's decision to grant interim relief to the petitioner.

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Issues involved:
1. Blocking of tax credit by respondent officers under State Goods and Services Tax Act and Central Goods and Services Tax Act.
2. Provisional attachment of property and stock under section 83 of the CGST Act.
3. Invocation of section 83 during proceedings under section 71(1) of the CGST Act.
4. Assessment order and impact on the attachment under section 83 of the CGST Act.

Analysis:
1. The petitioner's counsel argued that the respondent officers had blocked the tax credit of the petitioner without statutory authority under the State Goods and Services Tax Act or Central Goods and Services Tax Act. The counsel contended that there is no provision empowering the respondents to block the input tax credit of a supplier.

2. The petitioner referred to the order of provisional attachment of property under section 83 of the CGST Act and the attachment of the petitioner's stock. It was highlighted that these actions were taken in relation to proceedings initiated under section 71(1) of the Acts. The petitioner's counsel pointed out that section 83 of the CGST Act allows provisional attachment during proceedings under specific sections, which do not include section 71(1). Therefore, the provisional attachments were deemed to be without legal authority.

3. Subsequently, an assessment order was issued on 16.09.2019, indicating that once the assessment is completed, the attachment under section 83 of the CGST Act should no longer be in effect. This development was crucial in determining the validity of the provisional attachment of the petitioner's assets.

4. Considering the arguments presented by the petitioner's counsel, the Court issued a Notice returnable on 17th October 2019. As an interim measure, the respondents were directed to release the attachment of the petitioner's bank account and unblock the petitioner's credit available in the electronic credit ledger. This interim relief was granted based on the submissions made by the petitioner's legal representatives.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Court's decision regarding the blocking of tax credit and provisional attachment of assets under the relevant GST Acts.

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