Provisional assessment order lifted as no proceedings were pending under Section 73 and 74 of the CGST Act

Last updated: 24 August 2021

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Quick Summary

The Gujarat High Court has ruled that a provisional attachment of property under Section 83 of the CGST Act must be lifted if no proceedings are pending under Sections 73 or 74 of the Act. In this case, M/s Mahavir Enterprise successfully challenged the attachment because no such proceedings were active when the order was issued. The court also required the Assistant Commissioner of Sales Tax to explain the circumstances leading to the provisional assessment.

Court :
Gujarat High Court

Brief :
In M/s Mahavir Enterprise v. State of Gujarat [R/Special Civil Application No. 9586 of 2020 dated August 19, 2021], the Hon’ble High Court of Gujarat in its order has directed Assistant Commissioner of Sales Tax ('the Respondent No. 4') to lift the provisional attachment of the property of M/s Mahavir Enterprise ('the Appellant') under Section 83 of the Central Goods and Services Tax Act, 2017 ('the CGST Act').

Citation :
R/Special Civil Application No. 9586 of 2020 dated August 19, 2021

In M/s Mahavir Enterprise v. State of Gujarat [R/Special Civil Application No. 9586 of 2020 dated August 19, 2021], the Hon’ble High Court of Gujarat in its order has directed Assistant Commissioner of Sales Tax ('the Respondent No. 4') to lift the provisional attachment of the property of M/s Mahavir Enterprise ('the Appellant') under Section 83 of the Central Goods and Services Tax Act, 2017 ('the CGST Act').

The powers as mentioned in Section 83 ibid can only be exercised in case of pendency of proceedings under Section 62 or 63 or 64 or 73 or 74 of the CGST Act.

Noted, no proceedings were pending neither under Section 73 nor Section 74 on the date on which the order under Section 83 was passed by the Respondent No. 4.

Further directed the Respondent No. 4 to state on affidavit the circumstances under which the order of provisional assessment has been passed.

FAQ :

The case concerned the validity of a provisional attachment of property made under Section 83 of the CGST Act when no relevant proceedings were pending.

Provisional attachments under Section 83 of the CGST Act can only be made if proceedings are pending under Sections 62, 63, 64, 73, or 74 of the Act.

The attachment was lifted because the Gujarat High Court found that no proceedings under Section 73 or Section 74 of the CGST Act were pending at the time the attachment order was made.

The court directed the Assistant Commissioner of Sales Tax to lift the provisional attachment and to submit an affidavit explaining the circumstances under which the provisional assessment order was passed.