Power of provisional attachment under GST is draconian in nature

Last updated: 13 January 2022
Quick Summary
The Supreme Court has ruled that the power of provisional attachment under GST is 'draconian' and must be exercised with strict adherence to statutory conditions. The court set aside a Himachal Pradesh High Court decision that dismissed a company's challenge to a provisional attachment order, stating that such powers require careful justification. This ruling clarifies that the Revenue Department cannot arbitrarily attach assets without fulfilling the prescribed legal requirements.

Court :
Himachal Pradesh High Court

Brief :
The Hon’ble Supreme Court of India observed that the Hon’ble HP HC has erred in dismissing the writ petition on the ground that it was not maintainable and set aside the judgment passed and the orders of provisional attachment. Held that, the power to order a provisional attachment of the property of the taxable person including a bank account is draconian in nature and the conditions which are prescribed by the statute for a valid exercise of the power must be strictly fulfilled.

Citation :
Civil Appeal No 1155 of 2021 dated April 20, 2021

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Bimal Jain
Published in GST
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