Cash-credit facilities cannot be attached under Section 83 CGST Act but writ relief denied due to available statutory remedy

The Calcutta HC dismissed a petition challenging provisional attachment of a cash-credit facility under Section 83 of the CGST Act. The court held that while cash-credit facilities are not debts and cannot be attached, it declined to grant relief under Article 226 as an efficacious statutory remedy exists under Section 159(5) of the CGST Act. Following Supreme Court precedent in Mardia Chemicals Ltd. v. Union of India, the court ruled that writ jurisdiction should not be exercised when alternative statutory remedies are available, particularly in matters involving recovery of public money like GST.

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Issues involved:
1. Allegations of false export, incorrect e-way bills, and non-receipt of goods leading to a show cause notice for disallowing input tax credit, imposing interest, and penalty.
2. Provisional attachment of cash-credit facility by the respondent under Section 83 of the CGST Act challenged by the petitioner.
3. Contention regarding the availability of alternative statutory remedy under Rule 159 Sub-Rule 5 and the grant of relief under Article 226 of the Constitution of India.

Issue 1: Allegations of False Export and Incorrect E-way Bills
The petitioner, a partnership firm, faced allegations of false export, incorrect e-way bills, and non-receipt of goods, resulting in a show cause notice by the State Tax Department. The notice sought to disallow input tax credit, impose interest, and penalty. The petitioner challenged the notice in court, citing discrepancies in the allegations made by the authorities.

Issue 2: Provisional Attachment of Cash-Credit Facility
The respondent provisionally attached the cash-credit facility of the petitioner's firm, invoking Section 83 of the CGST Act to protect revenue. The petitioner contended that the cash-credit facility is not a debt and should not be subject to attachment. Citing legal precedents, the petitioner argued against the attachment, emphasizing the nature of the cash-credit facility and its usage for business purposes, including GST payments.

Issue 3: Availability of Alternative Statutory Remedy
The respondent argued that Rule 159 Sub-Rule 5 provides a remedy for property attachment, suggesting that the petitioner should follow the statutory procedure instead of seeking relief under Article 226 of the Constitution. Legal references were made to cases involving statutory remedies, emphasizing the importance of utilizing available avenues for redressal, especially in matters concerning recovery of public money such as GST dues.

In the judgment, the court considered the contentions of both parties. The petitioner relied on legal interpretations to assert that the cash-credit facility should not be subject to provisional attachment under Section 83 of the CGST Act. The court, guided by precedents and statutory provisions, concluded that the cash-credit facility is not akin to a debt and therefore cannot be attached. Additionally, the court highlighted the availability of alternative statutory remedies under Rule 159 Sub-Rule 5, emphasizing the importance of utilizing such remedies when they exist. Ultimately, the court dismissed the writ petition, directing the petitioner to pursue the available statutory relief mechanisms rather than seeking recourse under Article 226 of the Constitution.

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