Implement Impex Private Limited vs. State Of Maharashtra Through The P.P.Office

Held

The Court allowed the writ petition. Regarding the first issue, the Court held that the provisional attachment order ceases to be operative by operation of law, specifically by virtue of Section 83(2) of the CGST Act, which mandates that such attachments shall cease to have effect after one year from the date of the order. The Court directed the Joint Commissioner to immediately communicate to the petitioner's banker that the attachment order is no longer operative and that the petitioner may operate the attached bank account. This exercise was to be completed within seven days. Concerning the second issue, the Court held that in terms of Section 107(7) of the CGST Act, where the appellant has paid the amount under sub-section (6) of Section 107, recovery proceedings for the balance amount shall be deemed to be stayed. Since the petitioner had deposited Rs.1,25,392/- as pre-deposit, the respondents were restrained from initiating further recovery proceedings for the balance amount until the appeal is finally disposed of. No issue was expressly left undecided.

Facts

The petitioner, Implement Impex Private Limited, is challenging an order dated February 14, 2020, by the Joint Commissioner of State Tax, Investigation Branch-B, Mumbai, which provisionally attached the petitioner's bank account. This attachment was made under Section 83(1) of the CGST Act, read with Rule 159(1) of the CGST Rules, pending proceedings initiated under Section 67 of the CGST Act. The underlying proceedings concluded by an order dated August 28, 2020, which the petitioner appealed on October 27, 2020, depositing Rs.1,25,392/- as pre-deposit under Section 107(6) of the CGST Act. The petitioner's grievance in this writ petition is that despite over a year passing since the attachment order, the Joint Commissioner has not lifted the provisional attachment.

Key Issues

1. Whether the provisional attachment of the petitioner's bank account, ordered under Section 83(1) of the CGST Act, ceases to have effect by operation of law, specifically by virtue of Section 83(2) of the CGST Act, given that the underlying proceedings have concluded and more than one year has elapsed since the attachment order. 2. Whether recovery proceedings for the balance amount of tax, interest, or penalty can be initiated against the petitioner when a pre-deposit has been made in terms of Section 107(6) of the CGST Act, pending the disposal of the appeal. Petitioner's arguments: The petitioner contended that by operation of law, the provisional attachment order has ceased to exist due to the expiry of the one-year period stipulated in Section 83(2) of the CGST Act. They also argued that recovery proceedings for the balance amount should be stayed as they have made the required pre-deposit under Section 107(6) of the CGST Act. Respondents' arguments: The reply-affidavit filed by the Joint Commissioner did not address the legal issue raised by the petitioner regarding the cessation of the attachment order under Section 83(2). The judgment does not record any specific arguments from the respondents on this point.