Roshni Sana Jaiswal vs. Commissioner Of Central Taxes , GST Delhi (East)

Held

The Court held that the writ petition should be allowed, and the provisional attachment orders dated December 7, 2020, are quashed. The primary reason for this decision was that the petitioner is not a 'taxable person' as defined under Section 2(107) of the CGST Act, 2017. Section 83(1) of the Act explicitly states that provisional attachment can only be ordered against property belonging to a 'taxable person'. The Court noted that the impugned orders themselves identified Milkfood Ltd. as the taxable person. The definition of 'taxable person' requires registration or liability to be registered under Section 22 or 24 of the Act, which the respondent did not even claim for the petitioner. Therefore, the proceedings under Section 83 were fundamentally without jurisdiction on this ground alone. The Court also observed that the respondent had not placed any material to show that the concerned officer had applied their mind to the necessity of protecting revenue interest before invoking Section 83. The Court found nothing in the petitioner's voluntary statement that linked her to the purported illegal transactions or fake invoices. Consequently, the order dated April 19, 2021, disposing of the petitioner's objections, also collapses as the proceedings against her were without jurisdiction.

Facts

The petitioner, Roshni Sana Jaiswal, filed a writ petition challenging provisional attachment orders dated December 7, 2020, issued by the Commissioner of Central Taxes, GST Delhi (East). These orders attached several of the petitioner's bank accounts. The attachment was initiated in connection with an investigation against Milkfood Ltd., a company where the petitioner was a director between 2006 and 2008, and currently holds a 14.33% equity stake and acts as a mentor/advisor, receiving a salary of Rs. 1.50 crores in FY 2019-2020. The investigation against Milkfood Ltd. concerned the alleged availment of Input Tax Credit (ITC) against fake/ineligible invoices under Section 67 of the CGST Act, 2017. The respondent claimed the petitioner's voluntary statement was recorded on December 3, 2020, wherein she admitted her past directorship and current role. The petitioner argued the attachment was without jurisdiction.

Key Issues

1. Whether the provisional attachment of the petitioner's bank accounts under Section 83 of the CGST Act, 2017, is without jurisdiction because the petitioner is not a 'taxable person' as defined under Section 2(107) of the Act? Petitioner's arguments: The petitioner contended that the proceedings under Section 83 were without jurisdiction as she does not fall within the definition of a 'taxable person', which is Milkfood Ltd. She argued that the respondent failed to satisfy other conditions for invoking Section 83, namely, the existence of pending proceedings under Sections 62, 63, 64, 67, 73, or 74, and the necessity of attachment to protect revenue. The petitioner relied on the Supreme Court's judgment in M/s Radha Krishan Industries vs. State of Himachal Pradesh & Ors. Revenue's arguments: The respondent argued that the petitioner had availed an alternate remedy under Rule 159(5) of the CGST Rules, 2017, by filing objections, which were disposed of on April 19, 2021. They stated that investigations under Section 67 against Milkfood Ltd. were ongoing, and the company had availed approximately Rs. 85 crores of ITC based on fake invoices. The respondent also argued that the Radha Krishan Industries case was not applicable as no adjudication order had been passed in that case.