Neutron Steel Trading PVT LTD Through It Director 1 Mr Harjinder Singh 3 Neetu Arhi vs. The Commissioner CGST Central Ex Commissionweate Delhi West & Ors.

Held

The Court held that Rule 159(5) of the Central Goods and Services Tax Rules, 2017, is squarely applicable to the facts of the case. This rule provides a mechanism for any person whose property is attached to file an objection within seven days of the attachment, asserting that the property was or is not liable for attachment. The Court referred to a Gujarat High Court judgment in Pranit Hem Desai vs. Additional Director General, which dismissed petitions challenging attachment orders due to the availability of an efficacious alternative remedy under Rule 159(5). Following this precedent and a similar case, Watermelon Management Services Private Limited, the Delhi High Court directed respondent No.1 to treat the present writ petition as an objection under Rule 159(5). The Court ordered that this objection be decided within a week, after affording an opportunity of hearing to the petitioner, through a reasoned order. The Court did not decide the merits of the petitioner's contention regarding the validity of the attachment order itself, but rather directed the statutory remedy to be pursued.

Facts

The petitioner, M/s Neutron Steel Trading Pvt. Ltd., filed a writ petition challenging a provisional attachment order dated August 14, 2020, issued by the Commissioner CGST, Central Ex Commissionerate, Delhi West, to the petitioner's bankers. The petitioner argued that the power to attach provisionally under Section 83 of the CGST Act was exercised without the necessary prerequisite of pending proceedings under Sections 62, 63, 64, 67, 73, or 74 of the CGST Act. The respondents were represented by the Commissioner CGST and others. The matter was listed urgently and heard via video conferencing.

Key Issues

1. Whether the provisional attachment order issued under Section 83 of the CGST Act, 2017, is valid when no proceedings under Sections 62, 63, 64, 67, 73, or 74 of the CGST Act are pending against the petitioner? The petitioner contended that the sine qua non for exercising power under Section 83 of the CGST Act is the pendency of proceedings under the specified sections, which was absent in this case, rendering the attachment order without authority of law. The petitioner relied on the principle that statutory powers must be exercised within their prescribed limits. The respondents, represented by the Senior Standing Counsel, did not record any specific arguments in the judgment, but the Court's reasoning implies they relied on the existence of an alternative remedy.