Ashok Kumar Vishwakarma vs. Union Of INDIA

Held

The Court held that while the principle laid down in M/s. Radha Krishan Industries is correct, its application in the present case is misplaced. The Court noted that the facts of the Supreme Court case were different, involving a representation made by the appellant under sub-rule (5) of Rule 159. The Court found that Rule 159(5) of the CGST Rules, 2017, provides a specific mechanism for the Petitioner to file an objection to the attachment and seek a hearing from the Commissioner. The Court opined that this remedy is available to the Petitioner and that the Petitioner is not prevented from pursuing it. Consequently, the Court was not inclined to exercise its discretionary jurisdiction under Article 226 of the Constitution to interfere with the impugned attachment orders at this stage. The Petitioner was permitted to invoke sub-rule (5) of Rule 159 within one week of the order's upload, and the Commissioner was directed to decide the objection without raising any objection as to limitation.

Facts

The Petitioner, Ashok Kumar Vishwakarma, filed a writ petition before the Bombay High Court challenging two orders dated April 25, 2022, and April 6, 2023, passed by the Commissioner, CGST & Central Excise, Bhiwandi Commissionerate. These orders, issued under Section 83 of the CGST Act, 2017, provisionally attached the Petitioner's bank account and an immovable property. The Petitioner contended that the Commissioner failed to form an opinion based on tangible materials before issuing these attachment orders, thus violating principles of natural justice. The Revenue initiated proceedings against the Petitioner under Sections 67 and 74 of the CGST Act, alleging availment and passing of ineligible Input Tax Credit (ITC) amounting to Rs. 3.21 crores from non-genuine persons.

Key Issues

1. Whether the provisional attachment orders passed under Section 83 of the CGST Act, 2017, are liable to be set aside for failure of the Commissioner to form an opinion based on tangible materials, thereby breaching the principles of natural justice, as argued by the Petitioner, relying on M/s. Radha Krishan Industries vs. State of Himachal Pradesh & Ors.? 2. Whether the Petitioner is precluded from availing the remedy under sub-rule (5) of Rule 159 of the CGST Rules, 2017, which provides for filing an objection to the attachment and seeking a hearing from the Commissioner, as contended by the Revenue? The Petitioner argued that the attachment orders were passed without forming a proper opinion based on tangible materials, violating natural justice principles, citing the Supreme Court's decision in M/s. Radha Krishan Industries. The Revenue did not explicitly present arguments against the Petitioner's primary contention but implicitly supported the validity of the orders by highlighting the ongoing investigation and the Petitioner's alleged involvement in ineligible ITC. The Court's analysis focused on the applicability of Rule 159(5) to the present situation.