TaxTMI 
TaxTMI 
2026 (9) TMI 1825
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....sue raised in these writ petitions, a brief narration of facts involving the writ petitions can be mentioned. 4. W.P.[C] no. 4286/2026 : It is the case of the petitioner that her Savings Bank Account no. 50100153873394 maintained at HDFC Bank Ltd., Howrah Liluah Branch, West Bengal has been kept blocked since 19.05.2022 by the respondent CGST authorities purportedly in exercise of powers under Section 83 CGST Act read with Rule 159 of the Central Goods and Services Tax Rules, 2017 ['the CGST Rules', for short]. The petitioner has stated that she was never served with any Order of Provisional Attachment in Form GST DRC-22. Aggrieved by such action on the part of the respondent CGST Authorities, the petitioner stated to have made a Detailed Representation dated 25.03.2026 [submitted on 24.04.2026] before the respondent no. 5, requesting revocation of freezing of her Bank Account. However, no response was received from the end of the respondent no. 5 during the subsequent period. The petitioner again submitted a Representation dated 30.05.2026 [submitted on 11.06.2026], which was duly received by the respondent no. 5. But the respondent authorities were found to have maintained sil....
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....also submitted Representations, dated 25.03.2026 & dated 30.05.2026, before the respondent no. 5, which did not evoke any response. 7. The petitioners have stated that on the basis of intelligence gathered that the respondent authorities came to observe that certain registered tax payers were engaged in issuance of fake invoices without actual supply of goods and the registration of those tax payers got cancelled after operating for a short period of time, and upon perusal of the records available on E-Way portal, it was observed that those entities were supplying aluminium scrap, copper scrap, etc. to recipients situated at Kolkata, West Bengal during the period from February, 2022 to March, 2022. Based on the above inputs, inspections and searches were conducted at the registered premises of those entities and during the course of inspection and searches, none of those entities was found to have existed at their respective Principal Place of Business [PPoB] and they were declared as non-existent and fictitious. From the verification of GSTR-2A, it was observed that there was no inward receipt of goods by those entities. But, on verification of GSTR-1, it was observed that they....
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....rs that Sri Ashish Kumar Mandelia was the CEO [Erstwhile Director] of M/s Salasar Exim Limited on 25.06.2025. 9. It has been averred by the writ petitioner in W.P.[C.] no. 4286/2026 that she is the wife of Sri Amar Kumar Mandelia, who is one of the Directors in M/s Salasar Exim Limited. It is stated that Sri Amar Kumar Mandelia is involved in the business operation of M/s Salasar Exim Limited. 9.1. The writ petitioner in the writ petition, W.P.[C.] no. 4298/2026 has stated that Sri Ashish Kumar Mandelia and Sri Amar Kumar Mandelia are her sons and she had never received any summon or notice at any point of time. 9.2. It has been averred by the writ petitioner in W.P.[C.] no. 4299/2026 that Sri Ashish Kumar Mandelia and Sri Amar Kumar Mandelia are his sons. He has stated that he is only a shareholder in M/s Salasar Exim Limited and has no role in its business operations. He has stated that he had received a summon under Section 70, CGST Act from the respondent no. 5 and his statement was recorded on his appearance pursuant to receipt of the summons. 10. It is stated that the proceeding initiated against M/s Salasar Exim Limited and one Sri Ashish Kumar Mandelia who is th....
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.... from 13.05.2022 onwards. During the course of investigation under Section 70 of the CGST Act, statements of a number of persons were recorded. It is in course of such investigation, the Bank Accounts maintained by these petitioners came to be provisionally attached on 19.05.2022. Therefore, on and from 19.05.2023, the Provisional Orders of Attachment ought to have ceased effect. But, the petitioners were prevented from operating their respective personal Bank Accounts till date, which is contrary to the provisions of the CGST Act and the CGST Rules. 12.2. Mr. Mishra has pointed out that the investigation so initiated resulted in issuance of a Demand - cum - Show Cause Notice dated 25.06.2025 under Section 122 of the CGST Act to M/s Salasar Exim Ltd. and its CEO, Sri Ashish Kumar Mandelia. It is submitted that such Demand cum Show Cause Notice has not been issued to the petitioners in these three writ petitions. 13. Mr. Keyal, learned Senior Counsel & Special Counsel, CGST has submitted that during the proceedings initiated against M/s Salasar Exim Limited it was noticed that there were amounts which were transferred from the Account of M/s Salasar Exim Limited to the Account....
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....chever is lower, then such property shall be released forthwith, by an order in FORM GST DRC-23, on proof of payment. [4] Where [such person] fails to pay the amount referred to in sub-rule [3] in respect of the said property of perishable or hazardous nature, the Commissioner may dispose of such property and the amount realized thereby shall be adjusted against the tax, interest, penalty, fee or any other amount payable [such person]. [5] Any person whose property is attached may [file an objection in FORM GST DRC-22A ] to the effect that the property attached was or is Not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in FORM GST DRC- 23 . [6] The Commissioner may, upon being satisfied that the property was, or is No longer liable for attachment, release such property by issuing an order in FORM GST DRC- 23. 15. In Radha Krishan Industries vs. State of Himachal Pradesh and others, [2021] 6 SCC 771, the provision contained in Section 83 of the Himachal Pradesh Goods and Services Tax [HP GST] Act, 2017 came to be examined. The provi....
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....turns. Section 63 provides for assessment of unregistered persons. Section 64 contains provisions for summary assessment. Section 67 elucidates provisions for inspection, search and seizure. 15.2. It has been held that the power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account. The attachment is provisional and the statute has contemplated an attachment during the pendency of the proceedings under the stipulated statutory provisions. An attachment which is contemplated in Section 63 is at a stage which is anterior to the finalization of an assessment or the raising of a demand. A provisional attachment under Section 83 is contemplated during the pendency of certain proceedings, meaning thereby that a final demand or liability is yet to be crystalized. Section 83 required that there must be pendency of proceedings under the relevant provisions against the taxable person whose property is sought to be attached. 16. In Keshari Nandan Mobile vs. Office of Assistant Commissioner of State Tax [2], Enforcement Division - 5, [2026] 5 SCC 461, the provisional atta....
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....draconian power conferred by sub-section [1] and upon lapse as ordained by sub-section [2]. It is observed that the provisional attachment is a pre-emptive measure to protect the interest of Government revenue. It cannot function as a recovery measure; for that, the statute has other provisions. A period of one year, as ordained by the legislature, is enough for the revenue authorities to conclude its investigation; if not, the legislature could have provided for a renewal or an extended period. It has been held that sub-section [2] of Section 83 does not provide for any exception. Once the enquiry culminates into a final demand, recourse must be had to the appropriate provisions under the Statute which provide for recovery of the assessed tax, penalty, interest, etc. It has been held that the respondent could not have issued the impugned provisional attachment Orders dated 30.11.2024 and 18.12.2024 upon the previous ones having ceased to have any effect by operation of law after a year of their issuance. The Bank Accounts attached by the respondent were held to have been de-freezed. 17. In the light of the above, it is appropriate to refer to the contents of the two provisional....
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....e powers conferred under Section 83 of the Act, I, XXX, Additional Director General, Directorate General of GST Intelligence, Guwahati Zonal Unit, H.No. 77, Ward No. 54, Opposite Srimanta Shankardeva Kalakshetra, Panjabari Main Road, P.O. Panjabari, Guwahati, Assam - 781037 hereby provisionally attach the aforesaid accounts. No debit shall be allowed to be made from the said accounts or any other account operated by the aforesaid persons on the same PAN without the prior permission of this department. [XXX] ADDITIONAL DIRECTOR GENERAL 17.2. The following are the relevant excerpts from the provisional attachment Order dated 23.05.2022, whereby one of the two Bank Accounts of the petitioner in the writ petition, W.P.[C.] no. 4298/2026 was attached :- FOR GST DRC - 22 [See rule 159(1)] E.No.:DGGI/INT/INTL/581/2022-Gr D-O/o ADG-DGGI-ZU-GUWAHATI To, The Branch Manager, IndusInd Bank Ltd., G.S.Road, Bhangagarh, Above Bata Showroom, Guwahati - 781005 Provisional attachment of property under Section 83 It is to inform that M/s Salasar Exim Ltd. having principal p....