M/S Ashutosh Bandyopadhyay vs. The Union Of INDIA And Ors.

Facts

The petitioner, M/s Ashutosh Bandyopadhyay, challenged an order of provisional attachment dated February 14, 2024, issued by the Additional Director General under Section 83 of the CGST Act. The attachment pertained to Bank Account No. 36454272675 with the State Bank of India. The petitioner argued that the order was passed by an unauthorized authority (Additional Director General instead of the Commissioner) and that the attached account was a Cash Credit account, which, according to a Gujarat High Court decision in Manish Scrap Traders, cannot be provisionally attached. The petitioner contended that this attachment stalled their business operations, particularly at the close of the financial year. The Revenue sought time to obtain instructions and referred to CBIC circulars on provisional attachment. The Court, as an interim measure, stayed the attachment order, making it clear that the petition would be dismissed with costs if the account was not a Cash Credit account.

Held

The Court noted that the CGST/Revenue had placed on record written instructions indicating the revocation of the order of attachment dated February 14, 2024, in DRC-22. The Assistant Director, DGGI, Agartala Regional Unit, had requested the Branch Manager of SBI to restore the bank account. The bank's letter dated March 27, 2024, confirmed the restoration of various accounts, including the petitioner's Cash Credit account (Account No. 36454272675). Since the grievance of the petitioner regarding the provisional attachment stood redressed due to the revocation of the attachment order, the Court found no further necessity to adjudicate on the validity of the authority or the nature of the account. The writ petition was accordingly disposed of as the issue was resolved by the revenue's action.

Key Issues

1. Whether the provisional attachment order dated February 14, 2024, passed by the Additional Director General under Section 83 of the CGST Act, 2017, is invalid due to being issued by an unauthorized authority. 2. Whether a Cash Credit account can be provisionally attached under Section 83 of the CGST Act, 2017. Petitioner's arguments: The petitioner contended that the order of provisional attachment was passed by the Additional Director General, whereas Section 83 of the CGST Act confers this power only on the Commissioner. Furthermore, the petitioner argued that the attached bank account was a Cash Credit account, and such accounts are not amenable to provisional attachment under Section 83, citing the Gujarat High Court's decision in Manish Scrap Traders Vrs. Principal Commissioner. The petitioner also highlighted the severe business disruption caused by the attachment, especially during the financial year-end. Revenue's arguments: The Revenue stated that the attachment was made during an inspection where the petitioner was summoned under Section 70 of the CGST Act, and the attachment was a measure to protect the interest of the revenue. The Revenue referred to a CBIC circular dated February 23, 2021, laying down guidelines for provisional attachment.