2024 (8) TMI 454 - HC - GST

Court Directs Commissioner to Address Objections Within Three Weeks; Provisional Attachment Deemed Appropriate Under CGST Act.

The HC disposed of the petition by directing the Commissioner to address the petitioner's objections within three weeks. The court found the impugned ... Provisional attachment to protect revenue - Power of Commissioner under Section 83(1) of the CGST Act - Delegation/vesting of Commissioner's powers in Principal Director General/Principal Additional Director General - Objection under Rule 159(5) of the CGST RulesPower of Commissioner under Section 83(1) of the CGST Act - Delegation/vesting of Commissioner's powers in Principal Director General/Principal Additional Director General - Provisional attachment to protect revenue - Validity of the provisional attachment order under Section 83(1) of the CGST Act when signed by the Principal Additional Director General of GST Intelligence instead of a Commissioner - HELD THAT: - Section 83(1) confers power to provisionally attach property, including bank accounts, on the Commissioner where he is of the opinion that such attachment is necessary to protect the Government revenue. The term 'Commissioner' is defined in Section 2(24) to include the Commissioner of central tax and the Principal Commissioner appointed under Section 3. Section 3 and the administrative notification relied upon by the respondents indicate that the functional exercise of the Principal Chief Commissioner's powers can be effected by the Principal Director General, and by extension officers such as the Principal Additional Director General performing empowered functions under the notified delegation. The Court therefore held that the impugned order, having been passed by the Principal Additional Director General of GST Intelligence pursuant to the delegation/vesting of powers, was not rendered without jurisdiction merely because it was not signed by an officer titled 'Commissioner'. The petitioner's contention that only an officer bearing the strict designation 'Commissioner' could sign an order under Section 83(1) was rejected on this basis. [Paras 6, 7, 8, 9, 10]Impugned provisional attachment order was not invalid for want of jurisdiction because the Principal Additional Director General acted pursuant to delegated/vested powers of the Commissioner.Objection under Rule 159(5) of the CGST Rules - Provisional attachment to protect revenue - Requirement that the Commissioner decide the petitioner's pending objections under Rule 159(5) in relation to the provisional attachment and blocked Electronic Credit Ledger - HELD THAT: - The petitioner had filed objections under Rule 159(5) which remained undecided on the record. While the respondents stated that reasons to believe and the file material exist, the Court found it appropriate to secure an expeditious administrative decision on those objections. In view of the pendency and the statutory scheme that gives the affected person a right to have objections considered, the Court directed that the Commissioner (being the authority competent to adjudicate) shall decide the objections forthwith and in any event within a limited timeframe. [Paras 11, 12, 13]The Commissioner is directed to decide the petitioner's objections under Rule 159(5) expeditiously and, in any event, within three weeks from the date of the order.Final Conclusion: The challenge to the provisional attachment order was dismissed on the ground that the Principal Additional Director General validly acted under delegated/vested powers of the Commissioner; however, the petition was disposed of by directing the Commissioner to decide the petitioner's pending objections under Rule 159(5) within three weeks. Issues:1. Impugning an order under Section 83 of the Central Goods and Services Tax Act, 2017.2. Blocking of Electronic Credit Ledger (ECL) amount.3. Jurisdiction of passing the impugned order by the Commissioner.4. Necessity and reasons for provisional attachment of the bank account.Analysis:1. The petitioner challenged an order under Section 83 of the CGST Act, which provisionally attached their bank account. The petitioner was also aggrieved by the blocking of a specific amount in the Electronic Credit Ledger (ECL).2. The petitioner contended that only 'the Commissioner' could pass an order under Section 83(1) of the CGST Act. They argued that the impugned order lacked jurisdiction as it was not passed by the Commissioner and was without the necessary pre-condition of having a reason to believe that the order was essential to protect the government revenue.3. Section 83 of the CGST Act grants the power of provisional attachment to the Commissioner. The term 'Commissioner' is defined under Sub-section (24) of Section 2, including the Commissioner of central tax and other specified officers. The notification No. 14/2017-Central Tax dated 01.07.2017 allows certain officers to exercise the powers of the Principal Chief Commissioner. In this case, the impugned order was passed by the Principal Additional Director General of Goods and Services Tax Intelligence, which was deemed appropriate.4. The respondent's counsel assured that the reasons to believe that the provisional attachment of the bank account was necessary to protect the revenue were available and would be provided if required. The court directed the Commissioner to decide on the petitioner's objections promptly, within three weeks from the date, and disposed of the petition accordingly.