Shilpa Banda vs. The Commissioner Of Commercial Taxes

Held

The Court held that the impugned order dated March 11, 2024, which provisionally attached the petitioner's bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017, was set aside. This decision was based on the consensus between the parties that the power to provisionally attach property under Section 83 can only be exercised after the initiation of proceedings as mentioned in the section. In the present case, no notice was issued to the petitioner on or before March 11, 2024, the date of the impugned order. Therefore, the attachment was made without fulfilling the prerequisite of initiating proceedings. The Court reserved liberty to the respondents to proceed against the petitioner if the law permits and also reserved liberty to the petitioner to challenge any related orders or notices filed with the counter in appropriate proceedings. The Writ Petition was disposed of accordingly.

Facts

The petitioner, Shilpa Banda, filed a writ petition under Article 226 of the Constitution of India challenging an order dated March 11, 2024. This order, issued by the Commissioner of Commercial Taxes and served by the Assistant Commissioners of State Taxes, provisionally attached the petitioner's bank accounts. The attachment was made under Section 83 of the Central Goods and Services Tax Act, 2017. The petitioner sought a declaration that the attachment notice was void, illegal, arbitrary, and violative of constitutional provisions and principles of natural justice. The petitioner also sought interim relief to suspend the attachment and prevent further recovery, and to restrain any arrest of employees.

Key Issues

1. Whether the provisional attachment of the petitioner's bank accounts under Section 83 of the Central Goods and Services Tax Act, 2017, was validly made without prior initiation of proceedings as contemplated by the said section? The petitioner argued that the impugned order dated March 11, 2024, was passed without any prior notice being issued to the petitioner. The respondents, represented by the Special Government Pleader for State Tax, fairly submitted that the plain language of Section 83 of the Act makes it clear that the power to provisionally attach property can only be exercised after the initiation of any proceedings mentioned therein. Both parties agreed that the impugned order was passed without notice.