Provisional attachment under GST must be proportionate and based on tangible material; seized electronic records may be released with safeguards.

Provisional attachment under GST is an extraordinary measure that requires tangible material, recorded reasons and a proportionate response to protect revenue; wide attachment of stock, demat accounts and a current account that would disrupt normal business was found unjustified and quashed. Seized mobile phone, laptop and documents need not be retained indefinitely where the relevant electronic data can be preserved; release may be directed on an undertaking to keep the items intact, while permitting preservation of the original data in accordance with evidentiary requirements for electronic records. The broad attachment was invalidated and the electronic items and documents were ordered to be released subject to safeguards.

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Issues: (i) Whether the provisional attachment of stock, demat accounts and current account under the GST law was valid; (ii) Whether the seized mobile phone, laptop and documents were liable to be released, with permission to preserve electronic data by obtaining a certificate under the Information Technology Act.

Issue (i): Whether the provisional attachment of stock, demat accounts and current account under the GST law was valid.

Analysis: Provisional attachment is an extraordinary and draconian measure and can be resorted to only when the statutory preconditions are strictly satisfied on the basis of tangible material. The authority must apply due diligence, record reasons, and ensure that the attachment is confined to what is necessary to protect revenue. The impugned attachment of stock, demat accounts and current account would hamper normal business activities, and movable assets should not ordinarily be attached where less intrusive measures are available. The material on record did not justify such wide attachment.

Conclusion: The provisional attachment of the stock, demat accounts and current account was quashed and set aside, in favour of the petitioner.

Issue (ii): Whether the seized mobile phone, laptop and documents were liable to be released, with permission to preserve electronic data by obtaining a certificate under the Information Technology Act.

Analysis: The seized electronic devices and documents were not required to be retained indefinitely once the necessary data could be preserved. Release was warranted on an undertaking that the items and documents would be kept in original form and not disposed of during investigation, while permitting the authority to secure the original data in accordance with the evidentiary requirements relating to electronic records.

Conclusion: The seized mobile phone, laptop and documents were directed to be released, subject to the undertaking, in favour of the petitioner.

Final Conclusion: The writ petition was allowed in part by invalidating the broad provisional attachment and directing release of the seized electronic items and documents, while preserving the revenue authority's ability to secure electronic evidence.

Ratio Decidendi: Provisional attachment under GST can be upheld only on recorded, tangible material showing necessity to protect revenue, and the measure must be proportionate so as not to unnecessarily cripple legitimate business operations.

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