Vimal Yashwantgiri Goswami vs. State Of Gujarat

Facts

The petitioner, Vimal Yashwantgiri Goswami, approached the Gujarat High Court challenging orders of provisional attachment of his bank accounts and Input Tax Credit (ITC) by GST authorities. The respondent authorities, including respondent no. 2, had raided the petitioner's residential premises on July 19, 2019, and again on July 23, 2019. During these actions, a drawer containing files, a diary, a mobile, and a laptop was sealed. On July 23, 2019, the respondent no. 2 issued a summons under Section 70(1) of the CGST and GGST Acts and passed an order provisionally attaching two bank accounts (Current Account No. 777705000919 and Saving Account No. 231301000919 with ICICI Bank) under Section 83 of the CGST Act. The petitioner also challenged the provisional attachment of ITC under Rule 86A of the CGST Rules. The petition was filed invoking the writ jurisdiction under Article 226 of the Constitution of India.

Held

The Court held that the provisional attachment orders dated July 23, 2019, issued under Section 83 of the CGST Act and Rule 86A of the CGST Rules, had outlived their statutory right, as they would cease to operate after the expiry of one year from the date of the order. The Court noted that even the fresh orders of attachment dated July 24, 2020, and July 27, 2020, had also outlived their statutory life. Consequently, as of the date of the judgment, there were no subsisting orders of attachment for the petitioner's bank accounts or Input Tax Credit. Regarding the seized laptop and mobile phone, the Court referred to Section 67(7) of the CGST Act, which mandates the return of seized goods if no notice is issued within six months of seizure, with a possibility of extension for another six months upon sufficient cause. The Court observed that indisputably no notice had been issued and the six-month period had expired. Therefore, the Court directed the concerned authority to look into this aspect. The Court explicitly stated that the order was without prejudice to the rights of the department to initiate any further action in accordance with law.

Key Issues

1. Whether the provisional attachment orders dated July 23, 2019, issued under Section 83 of the CGST Act and Rule 86A of the CGST Rules, have ceased to have effect due to the expiry of their statutory period of one year. The petitioner argued that the orders of provisional attachment, being dated July 23, 2019, would automatically cease to operate after one year as prescribed under Section 83(2) of the CGST Act and Rule 86A(3) of the CGST Rules. The petitioner also referred to a draft amendment indicating a fresh order of attachment dated July 24, 2020, and July 27, 2020, which, according to the petitioner, had also outlived their statutory life. The revenue's arguments on this issue are not explicitly recorded in the judgment. 2. Whether the seizure of the petitioner's laptop and mobile phone under Section 67(2) of the CGST Act is valid, considering no notice was issued within six months of the seizure. The petitioner contended that his laptop and mobile phone were seized, and no notice was issued within the six-month period stipulated under Section 67(7) of the CGST Act, which mandates the return of seized goods if no notice is given within that timeframe. The revenue's arguments on this issue are not explicitly recorded in the judgment.