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Tax Authority's Provisional Attachment Order Lifted After Input Tax Credit Reversal and Procedural Irregularities HC allowed writ petition challenging tax authority's provisional attachment order under CGST Act. Court directed lifting of attachment after noting ...
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Tax Authority's Provisional Attachment Order Lifted After Input Tax Credit Reversal and Procedural Irregularities
HC allowed writ petition challenging tax authority's provisional attachment order under CGST Act. Court directed lifting of attachment after noting petitioner's reversal of input tax credit amount and delay in respondent's actions. Revenue authorities permitted to pursue legal remedies while attachment order was lifted, effectively providing relief to the petitioner with procedural safeguards.
Issues: Prayer for quashing impugned attachment order, jurisdiction of respondent no. 3, coercive measures against petitioner, defreezing bank account, reversal of ITC amount, penalty recovery, lifting provisional attachment order, imposition and recovery of penalty, relief sought for quashing order dated 10.06.2020.
Analysis: The petitioner filed a writ petition seeking various reliefs, including quashing of the attachment order dated 18.03.2020 and the order no. 02/2020 dated 10.06.2020 issued by respondent no. 3. The provisional attachment was made under Section 83 of the Central Goods and Services Tax Act, 2017, due to alleged fraudulent availment of input tax credit (ITC) by the petitioner amounting to Rs. 60,08,750/-. The total amount, including interest, had escalated to Rs. 75,16,900/ as per the respondent's claim. The petitioner, through their advocate, informed the court that the ITC amount had been reversed by the petitioner, and the matter was pending a decision on the same.
The court noted the delay in filing counter-affidavits by the respondents despite the notice issued earlier. The respondent contended that a penalty was also to be recovered from the petitioner. The court observed that the matter had been prolonged without necessary steps taken by the revenue authorities regarding the petition or penalty imposition. The petitioner asserted that the alleged ITC fraud had been rectified, including the interest component. Considering the duration of the attachment exceeding the prescribed timeframe under Section 83(2) of the CGST Act, the court directed the lifting of the provisional attachment order.
Consequently, the court ordered the lifting of the attachment and allowed the revenue authorities to take further legal steps as per the law. The petitioner agreed not to press for the relief sought in quashing the order dated 10.06.2020. The writ petition was disposed of in accordance with the directions provided by the court, and the pending application was closed as a result.
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