M/S S.R Traders vs. The Additional Director General

Held

The High Court dismissed the writ petition, holding that the provisional attachment orders were validly issued. The Court found that proceedings initiated under Section 74 of the CGST Act (falling under Chapter XV) justified the invocation of Section 83. It also affirmed that the Additional Director General had the delegated power to issue such orders, and noted the availability of an alternative statutory remedy under Rule 159(5) of the CGST Rules.

Facts

The petitioner, a partnership firm dealing in scrap goods, faced provisional attachment of its immovable properties and bank accounts by the Directorate General of GST Intelligence (DGGI) under Section 83 of the CGST Act. This action followed show cause notices alleging fraudulent input tax credit (ITC) availment from non-existent suppliers and 'fake invoices', leading to a potential tax liability of crores of rupees. The petitioner challenged the attachment, arguing lack of authority for the DGGI and that Section 83 was improperly invoked.

Key Issues

The key legal issues were whether the provisional attachment under Section 83 of the CGST Act was justified given the allegations of fraudulent ITC and whether the Additional Director General had the authority to issue such attachment orders.