Punjab Plywood Industries vs. Commissioner, Central Goods And Service Tax (CGST) And Others

Held

The Court held that the facts of the present case were squarely covered by the Supreme Court's judgment in M/s Radha Krishan Industries. The Supreme Court had ruled that Section 83 of the CGST Act requires the pendency of proceedings against the specific taxable person whose property is to be attached, and this power must be interpreted restrictively. In the present case, no notice had been issued to the petitioner under Section 74 or any other enumerated section of the CGST Act, meaning the pre-condition for provisional attachment under Section 83 was not satisfied. The Court also noted the Supreme Court's observation that a writ petition is maintainable against such an order as no appeal is provided under Section 107. Therefore, the order of provisional attachment was set aside. The Court allowed the petition based on the binding precedent.

Facts

The petitioner, Punjab Plywood Industries, challenged an order by the Commissioner, Central Goods and Services Tax (CGST), which modified a previous order attaching the petitioner's cash credit limit bank account. The initial attachment was made on July 16, 2021, under Rule 159(1) of the GST Rules. The petitioner filed objections, but as no decision was forthcoming, they filed a writ petition (CWP-15801-2021). This court directed the competent authority to decide the objections by August 23, 2021. The impugned order was passed subsequently. The petitioner argues that the modification was superficial and the attachment persisted. The respondents claim summons were issued for investigation, and the petitioner was uncooperative, justifying the order to provide alternative security.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account under Section 83 of the CGST Act, 2017, was valid, given the alleged non-pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74 of the Act against the petitioner at the time of attachment? The petitioner contended that the pre-conditions for exercising power under Section 83 were not met, as no proceedings under the specified sections were pending against them. They relied on the Supreme Court's judgment in M/s Radha Krishan Industries vs. State of Himachal Pradesh, which held that Section 83 requires pendency of proceedings against the specific taxable person whose property is sought to be attached and that such powers must be interpreted restrictively. The petitioner also argued that a writ petition is maintainable against such an order as no appeal lies under Section 107. The respondents argued that summons were issued for investigation, and the petitioner was not cooperating, thus justifying the impugned order which released the bank account upon provision of other security.