Rina Jaiswal vs. Commissioner Of Central Tax And 4 Others

Facts

The petitioner, Rina Jaiswal, proprietor of Vlaa Kali Industries, challenged provisional attachment orders dated July 15, 2022, issued by the Commissioner of Central Tax under Section 83 of the CGST Act, 2017. These orders attached her bank accounts and two immovable properties. The petitioner argued that the attachments were illegal and violative of natural justice and constitutional rights. Subsequently, an order-in-original was passed on December 15, 2022, against which the petitioner filed an appeal under Section 107 of the CGST Act. The respondents justified the initial attachment but acknowledged that the court might pass an appropriate order in light of subsequent developments.

Held

The Court held that the provisional attachment orders must cease to subsist once a final order of assessment is passed. This is because Section 107(6) of the CGST Act mandates pre-deposit of admitted tax, interest, fine, fee, and penalty, and 10% of the remaining disputed amount for filing an appeal. Furthermore, Section 107(7) provides that upon such payment, recovery proceedings for the balance amount are deemed to be stayed. The Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh had also held that provisional attachment must end upon the passing of a final assessment order. Since an order-in-original under Section 74 was passed and an appeal was filed under Section 107, the provisional attachment orders dated July 15, 2022, were no longer justified and were set aside. The Court allowed the writ petition.

Key Issues

1. Whether the provisional attachment orders issued under Section 83 of the CGST Act, 2017, remain valid after the passing of a final order-in-original under Section 74 of the CGST Act, 2017, and the filing of an appeal under Section 107 of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the provisional attachment orders should cease to subsist once a final order is passed and an appeal is filed, relying on the Supreme Court's decision in Radha Krishan Industries v. State of Himachal Pradesh. She contended that the subsequent filing of an appeal under Section 107, which requires compliance with pre-deposit provisions, should render the provisional attachment inoperative. Revenue's contention: The revenue authorities initially justified the provisional attachments as being warranted by the circumstances prevailing at the time. However, they conceded that the court could consider passing an appropriate order in view of the subsequent developments, specifically the passing of the order-in-original and the filing of the appeal.