Authority to issue Provisional Attachment Order under CGST Act is solely vested with the Commissioner

The Delhi High Court has ruled that only the Commissioner has the authority to issue provisional attachment orders for bank accounts under the CGST Act. In a case involving M/s. Vikas Enterprises, the court set aside an order issued by a Superintendent that had frozen the assessee's bank account. The court emphasised that such powers are vested solely with the Commissioner, citing a Supreme Court judgement, and even imposed costs on the Superintendent for exceeding his authority.

The Hon'ble Delhi High Court in M/s Vikas Enterprises v. Commissioner of Central Tax (GST), Delhi North &Anr. [W.P.(C) 9495 of 2023 dated July 31, 2023] set aside the letter issued by the Superintendent instructing to freeze the bank account of the assessee and held that the power to issue order of attachment of bank accounts under the Central Goods and Services Tax Act, 2017 ("the CGST Act") is only with the Commissioner and not below the rank of Commissioner can pass such order. Further, imposed the cost INR 5,000 on the Superintendent who issued such order.

Facts

M/s. Vikas Enterprises ("the Petitioner") maintained bank account with State Bank of India.The Branch Manager of the State Bank of India was served a communication dated March 03, 2022 ("the Impugned communication") by the Superintendent Anti-Evasiondirecting to furnish certain bank documents pertaining to the Petitioner and further directed the bank not to permit any debit from the Petitioner's bank account maintained with the said bank without prior permission of the Respondent.

The Petitioner filed writ before the Hon'ble Delhi High Court.

The Petitioner relied upon the Judgement of Radha Krishan Industries v. State of Himachal Pradesh & Ors. [(2021) 6 SCC 771] wherein the Hon'ble Supreme Court held that the order under Section 83 of the CGST Actcannot be passed by any officer other than the Commissioner and this can be done only if he is satisfied that it is necessary to pass such an order for protecting the interest of Revenue.

Issue

Whether is Superintendent has power to issue notice under Section 83 of the CGST Act to attach the bank Account?

Held

The Hon'ble Delhi High Court in W.P.(C) 9495 of 2023 held as under:

• Directed that, the Revenue Department is required to act by the statutory provisions.
• Relied upon the Judgement of Radha Krishan Industries v. State of Himachal Pradesh & Ors. [(2021) 6 SCC 771] wherein the Hon'ble Supreme Court held that the power under Section 83 of the CGST Act can be exercised only subject to the conditions, as specified therein, being fully satisfied. No order under Section 83 of the CGST Act can be passed by any officer other than the Commissioner and this can be done only if he is satisfied that it is necessary to pass such an order for protecting the interest of Revenue.
• Ordered to restore the bank account of a taxpayer wherein the directive was given by the superintendent.
• Held that, the power to order the attachment of bank accounts under the CGST Act is only on the commissioner.
• Set aside the Impugned Communication the extent that it seeks to place a debit freeze on the Petitioner's account and imposed the cost of INR 5,000 on the Superintendent.

Relevant Provision

Section 83 of the CGST Act

"Provisional attachment to protect revenue in certain cases

83. (1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1)."