The High Court of Bombay recently comprising of a bench of Justices Ujjal Bhuyan and Milind N. Jadhav observed that Section 83 does not provide for delegation or authorization; instead, it serves to preserve the government’s interests. (Praful Nanji Satra Vs the State of Maharashtra and 2 Ors.)
The court noted that Section 83 expressly prohibits any delegation or permission. The Commissioner’s view, as contemplated by Section 83 of the MGST Act, that it is appropriate to provisionally bind some land, even bank accounts, in order to safeguard the interests of government revenue. As a result, invoking any provision under the MGST Rules cannot be justified if the petitioner is prevented from obtaining redress or an alternative solution.
Facts of the Case
The petitioner is a businessman Situated in Andheri, Mumbai. He has various other businesses registered at the same address and he has also has rented out commercial premises on a leave and license basis receiving license fees from the licensees. Since the petitioner is required to pay goods and services taxes (GST) on such license fee, he is duly registered with the GST department and submitting GST returns regularly. Office of state tax carried out a search at the home address and summons were also issued under S.70 of MGST Act. Since, the same account was linked with GST and ICICI Bank, on or about the 3rd week of June 2020, the petitioner came to know that his bank account maintained with the ICICI Bank, which was being prevented from operating the said bank account. Aggrieved by such incident’s petitioner submitted a request to said authority to withdraw the provisional attachment of bank account forthwith. However, there was no response to the said representation.
The Petition was filed under Article 226 of the Constitution of India and the petitioner seeks to quash of provisional attachment order issued by respondent No.3 attaching the bank account of the petitioner maintained with the ICICI Bank.
Contention of the Parties
Mr. Pande submitted that even if the representation is construed to be an application under rule 159 (5) of the MGST Rules, then respondents were under an obligation to give a hearing to the petitioner and thereafter to take a decision in the matter. No such hearing was granted to the petitioner, not to speak of any decision taken.
While Mr. Pande has assailed the impugned provisional attachment as being without jurisdiction as no proceeding under any of the sections mentioned in section 83 of the MGST Act was pending against the petitioner and that power under section 83 is to be exercised solely by the Commissioner and not by the Joint Commissioner.
on the other hand, Ms. Chavan supported the impugned action as being just, proper and valid. Further Ms. Chavan has produced one file stated to contain the relevant note sheets and documents from out of the entire original file for perusal by the Court. On 08.02.2021, the file was retained for perusal.
Courts Observation & Judgment
Contending that proceedings under sections 62, 63, 64, 67, 73, and 74 of the MGST Act are pending against the petitioner, provisional attachment order has been justified. Petitioner has reiterated that to the best of his knowledge, no proceedings under sections 62, 63, 64, 67, 73, and 74 of the MGST Act were pending against him.
From a perusal of sub-section (1) of section 83, what is noticeable is that during the pendency of any proceedings under sections 62 or 63 or 64 or 67 or 73 or 74, the Commissioner should be of the opinion that for the purpose of protecting the interest of the government revenue, it is necessary to provisionally attach any property including bank account belonging to the taxable person, he may do so by making an order in writing.
On a proper analysis of the said provision, the court found that the following conditions are essential to clothe jurisdiction upon the Commissioner for exercising power under section 83.
Since the power under section 83 is vested in the Commissioner, it is necessary to refer to the definition of Commissioner in the MGST Act. Section 2 (24) of the MGST Act defines ‘Commissioner’.
The record does not disclose any authorization by the Commissioner to the Joint Commissioner to carry out provisional attachment. There is also no averment to that effect in the reply affidavit of the respondents. That apart, section 83 does not provide for such delegation or authorization.
Consequently and in the light of the above, the court was of the opinion that the impugned provisional attachment order dated 19.06.2020 cannot be sustained. The same is hereby set aside and quashed. The Court directed the respondents to forthwith withdraw the provisional attachment of the bank account of the petitioner bearing account No.001101218141 maintained with ICICI Bank Limited, Andheri West Branch, Mumbai.
The writ petition was accordingly allowed. However, there shall be no order as to costs.
Read Judgment @Latestlaws.com
Share this Document :Picture Source :
