TaxTMI 
TaxTMI 
2026 (4) TMI 782
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....e operation of the Impugned Orders dated 23 January 2026 being Exhibits A and B to this Petition and consequently direct the Respondent No.4 to forthwith withdraw the attachment of the bank accounts." 2. The grievance of the Petitioner is primarily against the impugned orders of attachment dated 23rd January 2026 (Exhibits A and B respectively). The impugned orders are intimation to the Petitioner's bankers namely Punjab National Bank, Mumbai and Saraswat Co-operative Bank Limited, Mumbai attaching the bank accounts of the Petitioner. One of such intimation issued to Punjab National Bank is extracted below : "Government of Maharashtra Department of Goods and Service Tax Office of The, Joint Commissioner of State Tax, . Investigation-A, C-Wlng, 2nd Floor, Old Building,, GST Bhavan, Mazgaon, Mumbai-400010 No/JCST/lNV-A/ M/s. Nivara Infradevelopers LLP /DRC-22/2025-26/E-118 Mumbai Dated 23-01-2026 "FORM GST DRC-22" (See rule 159[1]) To, The Manager, Punjab National Bank, Samartha Mandir, Bhalerao Wadi, Hanuman Road, Vileparle East, Mumbai, Maharashtra - 400057. IFSC: PUNB0373600 Account ....
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....2026. It is the Petitioner's contention that any action of provisional attachment without any opinion being formed, needs to be regarded as illegal, as attaching the Petitioner's bank accounts itself is a draconian action and for which necessarily an opinion is required to be formed on the basis of tangible material as per the settled principles of law. In support of such contention, Mr. Patkar, learned counsel for the Petitioner, has placed reliance on the decision of Supreme Court in Radha Krishan Industries Vs. State of Himachal Pradesh (2021) 6-SCC-771, in which the Supreme Court in the context of Section 83 of Himachal Pradesh Goods and Services Tax Act, 2017 has held that the power to levy a provisional attachment is draconian in nature, as by the exercise of the power, a property belonging to the taxable person can be attached, including a bank account. It is held that the language of the statute indicates first, the necessity of the formation of an opinion by the Commissioner; second, the formation of opinion before ordering a provisional attachment; thirdly the existence of opinion that it is necessary so to do for the purpose of protecting the interest of the Government r....
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....d the statute has contemplated an attachment during the pendency of the proceedings under the stipulated statutory provisions noticed earlier. An attachment which is contemplated in Section 83 is, in other words, at a stage which is anterior to the finalisation of an assessment or the raising of a demand. Conscious as the legislature was of the draconian nature of the power and the serious consequences which emanate from the attachment of any property including a bank account of the taxable person, it conditioned the exercise of the power by employing specific statutory language which conditions the exercise of the power. The language of the statute indicates first, the necessity of the formation of opinion by the Commissioner; second, the formation of opinion before ordering a provisional attachment; third the existence of opinion that it is necessary so to do for the purpose of protecting the interest of the government revenue; fourth, the issuance of an order in writing for the attachment of any property of the taxable person; and fifth, the observance by the Commissioner of the provisions contained in the rules in regard to the manner of attachment. Each of these components of ....
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.... implicate the doctrine of proportionality. Proportionality mandates the existence of a proximate or live link between the need for the attachment and the purpose which it is intended to secure. It also postulates the maintenance of a proportion between the nature and extent of the attachment and the purpose which is sought to be served by ordering it. Moreover, the words embodied in subsection (1) of Section 83, as interpreted above, would leave no manner of doubt that while ordering a provisional attachment the Commissioner must in the formation of the opinion act on the basis of tangible material on the basis of which the formation of opinion is based in regard to the existence of the statutory requirement. While dealing with a similar provision contained in Section 45 of the Gujarat Value Added Tax Act, 2003, one of us (Hon'ble M.R. Shah, J.) speaking for a Division Bench of the Gujarat High Court in Vishwanath Realtor v. State of Gujarat observed : (Vishwanath Realtor case, SCC OnLine Guj para 26) "26. Section 45 of the VAT Act confers powers upon the Commissioner to pass the order of provisional attachment of any property belonging to the dealer during the penden....
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....to be extracted, which read thus : "38. Further, the order in writing directing provisional attachment of the bank accounts must reflect as to why the proper officer is of the opinion that it is necessary to provisionally attach the bank account for the purpose of protecting the interest of revenue or preventing smuggling. These reasons must be set out in the order in writing. Further, the said order in writing must also disclose the tangible material on the basis of which the proper officer has formed such an opinion. 39. The power exercised by the proper officer in directing provisional attachment of the bank account of a person is quite drastic or coercive in nature resulting in attracting civil consequences. If a bank account of a person is attached, it would certainly cause severe prejudice to that person. The Legislature, whilst enacting the provisions of section 110(5) of the Act was conscious of the severity of such power and the serious consequences which would emanate from the provisional attachment of any property, including a bank account, of a taxable person, and, therefore, it conditioned the exercise of the power by employing specific statutory lang....
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....h 11 of its affidavit in reply, respondent No. 3, quite surprisingly, contended that, as per the provisions of section 110(5) of the Act, no written order for provisional attachment of a bank account is required to be passed. The relevant part of paragraph 11 of the affidavit in reply of respondent No. 3 reads as under: "As per the provision of the section 110(5) of the Customs Act, 1962, no written order for provisional attachment of a bank account is required to be passed and the letter issued to the bank for provisional attachment is deemed to be an order which issued with the approval of the Principal Commissioner of Customs or Commissioner of Customs." (emphasis supplied) 6. Mr. Patkar has also submitted that the impugned attachment order, in fact, is required to be held to be high handed, arbitrary and based on extraneous considerations. He has made this submission on two grounds. Firstly, without following the due procedure known in law, the Joint Commissioner of State Tax has erroneously issued the impugned order by completely bypassing the procedure. The second contention is that on 30th January 2026 the Petitioner addressed a detailed objection respon....
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....rom such mandatory requirements of law. Any action on the part of the officers who are supposed to act within the framework of law, cannot be taken in a high handed manner and/or for extraneous considerations, as rightly contended by Mr. Patkar. It is the rule of law which is taken to the ransom by such officials when they knowingly breach the law, that too with impunity. 11. Mr. Patkar would also submit that such officers, who abuse the powers as conferred on them easily get away, in the event the orders passed by such officers are simplicitor set aside, there is no deterrent, so that such high handed and arbitrary actions are not repeated in future. We find ourselves in agreement with Mr. Patkar. It is difficult to believe that the officers who are vested with such draconian powers are not aware as to how the same is required to be exercised as the law would mandate. Moreover, such officers cannot be permitted to openly defeat the provisions of law and the law as declared by the Supreme Court (supra). In our opinion, in the event, the concerned officials are to adhere to the basic norms and procedure in conducting any proceedings under the tax laws, majority of the litigation ....