2022 (10) TMI 674 - HC - GST

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 ... Provisional attachment order - Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The record shows [something which has also been noted in order dated 29.08.2022] that notice in the writ petition was issued as far back as on 24.07.2020, despite which, counter-affidavit(s) have not been filed on behalf of the respondents, which includes the contesting respondents/revenue - the matter has been hanging fire without the respondents/revenue taking requisite steps, either vis-a-vis the petition or with regard to imposition and/or recovery of penalty. Given the fact that the present attachment has continued beyond the timeframe prescribed under Section 83(2) of the CGST Act, we are inclined to direct that the same be lifted - Petition disposed off. 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.