Provisional attachment order under Section 83 CGST Act quashed for lack of prior Section 74 notice

The HC quashed a provisional attachment order dated 22.10.2021 issued under Section 83 of the CGST Act, 2017, finding it without jurisdiction. The court held that proceedings under Section 74 of the CGST Act must commence with issuance and service of notice upon the assessee. Since the respondent admitted in their affidavit that no notice under Section 74 had been issued prior to the attachment order, the attachment was deemed unsustainable. The petition was allowed and the attachment order was set aside.

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Issues:
Challenge to provisional attachment of bank accounts under Section 83 of the CGST Act, 2017.

Analysis:
1. The petitioner sought a writ of certiorari to quash the order directing provisional attachment of bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017.

2. The relevant provisions of Section 83 of the CGST Act, 2017 and Rule 159 of the CG & ST Rules, 2017 were examined. The section allows provisional attachment of property, including bank accounts, to protect government revenue during specific proceedings.

3. The respondent confirmed that proceedings under Section 74 of the CGST Act were pending at the time of attachment. However, it was noted that no notice under Section 74 had been issued, rendering the attachment order without jurisdiction and unsustainable.

4. The respondent referred to an amendment to Section 83 through Section 115 of the Finance Act, 2021, which came into force from 01.01.2022. As the amendment was not in effect when the impugned attachment order was passed, it was deemed unavailable.

5. The Court held that since no notice under Section 74 had been issued at the time of attachment, the order lacked jurisdiction. Consequently, the writ petition was allowed, quashing the attachment order and granting respondents the liberty to proceed as per law.

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