Don’t indiscriminately attach bank accounts: High Court

14 Sep 2019

Categories: Latest News

The Gujarat HC on Friday directed Goods & Services Tax (GST) officials not to use their powers to attach properties during tax evasion probes to “harass” businessmen.

The HC observed that attachment of properties, especially bank accounts of businessmen, may damage their business. Hence the power should be used sparingly.

The HC was dealing with cases filed by one Pranit Desai & his 6 companies after Goods & Services Tax (GST) officials attached various bank accounts during investigation into input tax credit fraud to the tune of Rs 43 crore. Desai complained that the attachment was affecting his business badly because he was unable to make transactions since March. He is into manufacturing of refractive lining material.

The issue before the HC was powers conferred on Goods & Services Tax (GST) officials under Section 83 of the Goods & Services Tax (GST) Act. The bench of Justice J B Pardiwala & Justice A C Rao observed that provisional attachment under Section 83 should be made after the assessing officer feels that it is absolutely necessary in the interest of revenue.

The High Court said, “The power conferred upon the Assessing Authority under Section 83 is very drastic, far-reaching power & that power has to be used sparingly & only on substantive weighty grounds & for valid reasons. To ensure that this power isn't misused, no safeguards have been provided in the Section 83…It shouldn't be exercised unless there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of the whole or any part of his property with a view to thwarting the ultimate collection of the demand.”

The HC made it clear, “It (attachment) should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee.” The HC ordered the govt to release all bank accounts belonging to Desai & his 6 companies.

Source Link

Tags : Gujarat High Court Goods and Services Tax (GST) Goods and Services Tax (GST) Act

Download the LatestLaws.com Mobile App