Court quashes GST attachment order, allows department to act afresh

The court partly allowed the writ application by quashing the provisional attachment order in Form GST DRC-22 dated 27.07.2020 under Section 83 of the Act due to lack of credible material. However, the relief sought to quash Form GST DRC-01A dated 24.07.2020 was not granted. The court allowed the department to take appropriate action afresh in accordance with the law, lifting the attachment of factory premises and preventing coercive action against the petitioner. The direction to transfer proceedings to the CGST department was not specifically addressed in the judgment.

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Issues Involved:
1. Quashing of Form DRC-01A dated 24.07.2020.
2. Quashing of the provisional attachment order in Form GST DRC-22 dated 27.07.2020.
3. Direction to transfer proceedings to the CGST department.
4. Interim reliefs including lifting the attachment of factory premises, staying the operation of Form GST DRC-01A, and preventing coercive action against the petitioner.

Issue-wise Detailed Analysis:

1. Quashing of Form DRC-01A dated 24.07.2020:
The court examined the writ applicant's challenge against Form GST DRC-01A issued on 24th July 2020. The court concluded that it was not inclined to interfere with the order passed in Form GST DRC-01A. Thus, the relief sought by the petitioner to quash this form was not granted.

2. Quashing of the provisional attachment order in Form GST DRC-22 dated 27.07.2020:
The court scrutinized the provisional attachment order issued under Section 83 of the GST Act in Form GST DRC-22. It was observed that the order was a mechanical exercise of power without any credible material. The court emphasized that Section 83 requires the Commissioner to form an opinion based on material evidence to protect government revenue. The court cited various precedents to highlight that the formation of such an opinion must be based on credible material and not on imaginary grounds. The court concluded that the provisional attachment order lacked the necessary material and intense application of mind. Therefore, the order of provisional attachment of the immovable property was quashed and set aside.

3. Direction to transfer proceedings to the CGST department:
The writ applicant requested the court to direct the transfer of proceedings to the CGST department, which had already initiated the inquiry. However, the court did not provide a specific ruling on this issue within the judgment.

4. Interim reliefs including lifting the attachment of factory premises, staying the operation of Form GST DRC-01A, and preventing coercive action against the petitioner:
Given the quashing of the provisional attachment order, the interim reliefs sought by the petitioner regarding lifting the attachment of factory premises and preventing coercive action were rendered moot. The court clarified that the department could take appropriate action afresh, strictly in accordance with the law.

Conclusion:
The writ application was partly allowed. The order of provisional attachment of immovable property under Section 83 of the Act was quashed and set aside. The relief with regard to the order in Form GST DRC-01A was not granted. The court permitted the department to take appropriate action afresh in accordance with the law. The connected civil application for stay was disposed of accordingly.

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