AI Drafter 
TaxTMI 
TaxTMI 
2025 (11) TMI 61
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.... the Central Goods and Services Tax Act, 2017 (for short, 'CGST Act'), has been quashed. 2.1 The writ petition was filed with a prayer to quash the blocking of Input Tax Credit (ITC) and the provisional attachment of the bank account, as well as the blocking of the electronic credit ledger, along with consequential relief directing the unblocking of ITC and the release of the bank account. 2.2 Learned counsel for the appellant submits that the present appeal concerns only the provisional attachment of the bank account. Accordingly, this judgment is confined to the issue of provisional attachment of the bank account. 3. The respondent-assessee is registered under the provisions of the GST Act, 2017, and is engaged in the supply of taxable services under the category of construction activities and other taxable services. Summons under Section 70 of the CGST Act were issued to gather evidence relating to inward and outward supplies along with invoices. The respondent failed to comply with the said summons. The appellants thereafter conducted further investigation and found misuse of input tax credit and unsubstantiated transactions. Invoking Section 83 of the CGST Act, the ap....
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....sed has been summarized by the Hon'ble Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh [2021(48) G.S.T.L. 113 (S.C.)]. It is submitted that, in order to invoke provisional attachment under Section 83 of the CGST Act, proceedings under Chapter XII, XIV, or XV must have been initiated. It is further submitted that though the provisional attachment order refers to initiation of proceedings under Sections 74 and 122 of the CGST Act, no such proceedings, in fact, have been initiated to the knowledge of respondent No.1. It is contended that if the essential ingredients of Section 83 of the CGST Act are not satisfied, the provisional attachment thereunder is not maintainable. It is accordingly submitted that, in the absence of initiation of proceedings, the provisional attachment under Section 83 of the CGST Act is unsustainable. 6. In rejoinder, Sri Aravind V. Chavan, learned Senior Standing Counsel, submits that proceedings under Section 70 of the CGST Act were initiated by issuance of summons for recording the statement of respondent No.1. Since Section 70 falls under Chapter XII, the ingredients for invoking Section 83 of the CGST Act stand satisfied. 7. I....
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.... it is evident that the provision does not, in any manner, mandate a pre-decisional hearing for the assessee. It is a settled position of law that, in interpreting a statutory provision, its plain meaning must be given. It is not permissible to omit any words or to read in words by implication. In this context, reliance may be placed on the judgment of the Hon'ble Supreme Court in CIT v. Calcutta Knitwears [(2014) 6 SCC 444]: "20. Section 158-BD of the Act provides for "undisclosed income" of any other person. Before we proceed to explain the said provision, we intend to remind ourselves of the first or the basic principles of interpretation of a fiscal legislation. It is time and again reiterated that the courts, while interpreting the provisions of a fiscal legislation should neither add nor subtract a word from the provisions of instant meaning of the sections. It may be mentioned that the foremost principle of interpretation of fiscal statutes in every system of interpretation is the rule of strict interpretation which provides that where the words of the statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than....
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....ends to grant an opportunity of hearing, it does so expressly. Rule 159 specifically mandates an opportunity of hearing to the person affected. For this reason as well, we hold that Section 83 of the CGST Act does not require a pre-decisional hearing. 14. The learned Single Judge, in setting aside the provisional attachment under Section 83 of the CGST Act, relied upon the judgment of the Division Bench in K-9 Enterprises (supra). However, the said judgment does not pertain to provisional attachment under Section 83 of the CGST Act. 15. In the light of the foregoing discussion, we hold that no opportunity of hearing is required before passing an order of provisional attachment under Section 83 of the CGST Act. We accordingly answer Point No. 1 in the negative. Regarding point No.2: 16. Section 83 of the CGST Act can be invoked if, in the opinion of the Commissioner, it is necessary for the purpose of protecting the interest of Government revenue. However, on a plain reading of Section 83, such opinion can be formed only after the initiation of proceedings under Chapter XII, XIV, or XV of the Act. In the impugned attachment order, it is stated that proceedings under Sect....
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....t to determine whether proceedings should be initiated against the assessee. Such evidence-gathering and inquiry do not constitute "proceedings" within the meaning of Section 6(2)(b) of the CGST Act. The mere issuance of a summons cannot be equated with proceedings barred under the Act, as the subject matter cannot be ascertained, solely through summons. That said, summons should not be issued in routine matters or for documents readily available on the GST portal. They ought to be issued after much thought and consideration as to the exact information required. We acknowledge that the issuance of multiple, cyclostyled summons may indicate a roving inquiry. 62. The High Court correctly held that the term "any proceedings" does not encompass summons issued pursuant to a search or investigation, as at the stage of issuance of summons the Department is merely engaged in gathering information. We are in agreement with the finding that a case of search is clearly distinct and separate from proceedings initiated only after issuance of a show cause notice." 17. In the light of the principles enunciated by the Hon'ble Supreme Court, we hold that the mere issuance of summons und....
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....rts is now interpreted and explained below: (i) The power to order a provisional attachment is entrusted during the pendency of proceedings under any one of six specified provisions: Section 62, 63, 64, 67, 73 or 74. In other words, it is when a proceeding under any of these provisions is pending that a provisional attachment can be ordered; (ii) The power to order a provisional attachment has been vested by the Legislature in the Commissioner; (iii) Before exercising the power, the Commissioner must be "of the opinion that for the purpose of protecting the interest of the government revenue, it is necessary so to do"; (iv) The order for attachment must be in writing; (v) The provisional attachment which is contemplated is of any property including a bank account belonging to the taxable person; and (vi) The manner in which a provisional attachment is levied must be specified in the rules made pursuant to the provisions of the statute. 42. Under sub-section (2) of Section 83, a provisional attachment ceases to have effect upon the expiry of a period of one year of the order being passed under sub-section (1). The power ....
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....m of ITC for FYs 2017-18 and 2018-19. GM Powertech is alleged to have passed on the ITC to various Registered Tax Persons ["RTP"] situated in Himachal Pradesh by issuing invoices inter alia to the appellant during 2018-19 for which a case under Section 74 had been initiated. The order records that the appellant had claimed ITC of Rs. 3.25 crores on the strength of the invoices issued by GM Powertech. The order merely records that the submissions which were urged by the appellant on 5 August, 2020 "are not sustainable". "In view of the facts involved in the case", the Joint Commissioner concluded that it is necessary at this stage to safeguard the government revenue and since the appellant had sold goods to Fujikawa the payment due to it was being attached provisionally. The order of the Joint Commissioner contains absolutely no basis for the formation of the opinion that a provisional attachment was necessary to safeguard the interest of the revenue. No tangible material has been disclosed. The record clearly reveals a breach of the mandatory pre-conditions for the valid exercise of powers under Section 83 of the HPGST Act. 67. The order of provisional attachment under Sec....
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....he interest of the government revenue. Before ordering a provisional attachment the Commissioner must form an opinion on the basis of tangible material that the assessee is likely to defeat the demand, if any, and that therefore, it is necessary so to do for the purpose of protecting the interest of the government revenue. (vi) The expression "necessary so to do for protecting the government revenue" implicates that the interests of the government revenue cannot be protected without ordering a provisional attachment; (vii) The formation of an opinion by the Commissioner under Section 83(1) must be based on tangible material bearing on the necessity of ordering a provisional attachment for the purpose of protecting the interest of the government revenue; (viii) In the facts of the present case, there was a clear non-application of mind by the Joint Commissioner to the provisions of Section 83, rendering the provisional attachment illegal; (ix) Under the provisions of Rule 159(5), the person whose property is attached is entitled to dual procedural safeguards: (a) An entitlement to submit objections on the ground that the property was or i....