M/S Kanal Enterprise vs. State Of Gujarat

Held

The Court held that the impugned order of attachment of property under Section 83 of the CGST Act could not have been passed on the ground of proceedings instituted under Section 71(1) of the Act. The Court noted that Section 83 of the Act can be invoked during the pendency of proceedings under Sections 62, 63, 64, 67, 73, and 74 of the Act. It found no power vested in the authorities to invoke Section 83 during proceedings initiated under Section 71(1). The Court further observed that there cannot be any proceedings that could be instituted under Section 71 of the Act, as Section 71 pertains to access to business premises. Consequently, the impugned order of attachment under Section 83 was quashed and set aside. The Court clarified that any appeal preferred by the writ-applicant against the final order of assessment would be decided in accordance with law by the Appellate Authority.

Facts

The petitioner, M/s Kanal Enterprise, filed a writ application challenging orders of provisional attachment of its stock of goods valued at Rs. 1,26,00,000 and its current bank account, both dated July 30, 2019, passed by Respondent No. 2. The petitioner also challenged the blocking of its input tax credit (ITC) of Rs. 24,30,850, communicated on July 20, 2019, by Respondent No. 3. The attachments were purportedly made in relation to proceedings under Section 71(1) of the GST Acts. The petitioner argued that Section 83 of the CGST Act, under which provisional attachments are made, can only be invoked during proceedings under specific sections (62, 63, 64, 67, 73, or 74), not Section 71(1). An assessment order was subsequently framed on September 16, 2019.

Key Issues

1. Whether the provisional attachment of the petitioner's stock of goods and bank account under Section 83 of the CGST Act was validly passed in relation to proceedings initiated under Section 71(1) of the GST Acts? Petitioner's Contention: The petitioner argued that Section 83 of the CGST Act empowers provisional attachment only during the pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74. It contended that there is no provision for invoking Section 83 in proceedings under Section 71(1), making the attachment orders without authority of law. The petitioner also argued that once an assessment order is framed, the attachment under Section 83 would no longer survive. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or state.