Court Upholds Attachment Decision, Emphasizes Commissioner's Role in Safeguarding Revenue

The Court rejected the petitioner's challenge to the impugned order under Section 5(3) of the KGST Act, 2017/CGST Act, 2017 and Section 83 of the CGST Act, 2017. It emphasized the necessity of the commissioner's involvement in attachment decisions to safeguard government revenue. Despite the petitioner's objections to delegation under Section 5(3) of the GST Act, the Court focused on the lack of invoices for a credit claim. The Court proposed lifting the attachment upon the petitioner providing a bank guarantee but deemed the delegation issue academic due to the petition's disposal and the government's decision to halt Section 67 proceedings. The petitioner's request to continue proceedings was denied, and an order required maintaining a specified balance as security until assessment proceedings conclude.

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Issues:
Challenge to impugned order under Section 5(3) of KGST Act, 2017/CGST Act, 2017 and Section 83 of CGST Act, 2017; Delegation of power under Section 5(3) of GST Act; Impermissibility of delegation principles; Initiation of proceedings under Section 67 of KGST Act, 2017; Attachment of bank account under Section 83 and Section 5(3) of KGST Act; Clarification requirements for furnishing information; Assessment proceedings initiation; Claim of credit for input tax; Court's view on lifting attachment order; Adjudication of challenge to orders at Annexure-A; Disposal of main petition and non-proceeding with Section 67 proceedings; Academic question of delegation under Section 83; Rejection of continuing present proceedings request; Setting aside of order at Annexure-L; Requirement to maintain balance as security till assessment proceedings conclusion.

Analysis:
The petitioner challenged the impugned order under Section 5(3) of the KGST Act, 2017/CGST Act, 2017 and Section 83 of the CGST Act, arguing that the power of attachment must be exercised by the commissioner for protecting the government revenue. Reference was made to a judgment of the High Court of Gujarat emphasizing the importance of the designated officer's satisfaction under Section 83. The petitioner also contended that delegation of power under Section 5(3) of the GST Act is absent, highlighting the principles against impermissible delegation set by the Gujarat High Court.

Proceedings were initiated against the petitioner under Section 67 of the KGST Act, 2017, requiring the submission of specific documents. Despite the petitioner's reply to the notice, the bank account was attached under Section 83 read with Section 5(3) of the KGST Act. The petitioner was directed to clarify further information requirements during the proceedings, and the government advocate stated that assessment proceedings would be initiated based on available material, indicating a halt to Section 67 proceedings.

The Court, considering the absence of invoices for a credit claim, proposed lifting the attachment order upon the petitioner furnishing a bank guarantee. However, the Court noted that the challenge to the delegation under Section 83 and Section 5(3) would remain an academic question due to the disposal of the main petition and the government's decision not to proceed with Section 67 proceedings based on the material provided.

Ultimately, the Court rejected the petitioner's request to continue the proceedings, keeping the contentions open but disposing of the petition. The order at Annexure-L was set aside, with a requirement for the petitioner to maintain a specified balance in the account as security until the assessment proceedings conclude.

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