Bank account provisional attachment under CGST Act Section 83 upheld for revenue protection during pending proceedings

Punjab and Haryana HC dismissed petition challenging provisional attachment of bank account under CGST Act. Court held that once proceedings were initiated under Section 67 (Chapter XIV), provisional attachment under Section 83 was valid for one year period. Despite 2022 amendment to Section 83(1), attachment power could be exercised as proceedings fell under Chapter XV. Court ruled attachment necessary to safeguard government revenue interests pending adjudication of show cause notice and realization of confirmed dues. Petition found devoid of merit.

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Issues Involved:
1. Validity of the provisional attachment of the petitioner's bank account under Section 83 of the CGST Act.
2. Whether the proceedings initiated under Section 122 read with Section 127 fall under Chapters XII, XIV, or XV of the CGST Act.
3. Whether the petitioner has exhausted all statutory remedies before filing the writ petition.

Summary of Judgment:

Issue 1: Validity of the Provisional Attachment
The petitioner-assessee challenged the provisional attachment of their bank account under Section 83 of the CGST Act. The Court noted that search operations were conducted on 08.01.2021 under Section 67, and the bank account was attached to safeguard government revenue. The petitioner's objections to the initial attachment were decided, and the account was released, only to be re-attached on 20.01.2023. The Court found no infirmity in the provisional attachment, as it was done to protect government revenue and was valid for one year.

Issue 2: Proceedings Under Section 122 Read with Section 127
The petitioner argued that proceedings under Section 122 read with Section 127 do not fall under Chapters XII, XIV, or XV, making the attachment unlawful. However, the Court observed that the proceedings initiated under Section 67 fall under Chapter XIV. Therefore, the attachment was valid under the amended Section 83(1) of the CGST Act, effective from 01.01.2022. The Court referenced the Supreme Court's judgment in M/s Radha Krishan Industries vs. State of Himachal Pradesh, which considered the amended provisions of Section 83.

Issue 3: Exhaustion of Statutory Remedies
The respondents argued that the petitioner had not availed the statutory remedy of filing objections to the provisional attachment order, making the writ petition premature. The Court agreed, citing the Supreme Court's judgment in State of Punjab vs. M/s Shiv Enterprises, which emphasized that High Courts should not entertain writ petitions if effective statutory remedies are available. The Court also referenced United Bank of India vs. Satyawati Tondon, reiterating that petitioners must exhaust statutory remedies before approaching the High Court.

Conclusion
The Court dismissed the writ petition, finding it devoid of merit. The provisional attachment of the petitioner's bank account was upheld as valid, and the petitioner's failure to exhaust statutory remedies rendered the writ petition premature.

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