The effect of Section 83 of the CGST Act comes to an end as soon as the proceedings pending in Section 67 are over. P&H HC
Forum: Punjab & Haryana High Court
The Petitioner is carrying out the academic programs in India of the University of Fraser Valley, Canada ( “UFV, Canada”). The degrees awarded by the UFV, Canada are recognized by the Panjab University.
On 27.07.2020, the officials of the Directorate General of Goods and Services Tax Intelligence, Chandigarh Zonal Unit (“DGGSTI”) visited the premises of the Petitioner and recorded the statements of its Associate Director(s). On 30.07.2020, the Officer of the DGGSTI sent an e-mail to the Petitioner that its bank account has been provisionally attached under Section 83 of the Central Goods and Services Tax Act, 2017 .
The Petitioner filed an objection under Rule 159 (5) of the Central Goods and Services Tax Rules, 2017 against the provisional attachment of the bank account and it was submitted that it had to make the urgent payments, therefore, account may be released from the attachment. Respondent No. 2 passed the order of partly releasing the bank account for payments under the Amnesty Scheme but rejected the prayer to release the provisional attachment holding that the Petitioner does not have any property other than the Bank Account from where the Government revenue can be protected.
The Petitioner thus filed a writ petition before the Hon’ble HC seeking release the the bank account of the Petitioner which has been provisionally attached.
The question, arose as what is the import of Section 83 of the Act for the purpose of issuing the order of provisional attachment of the bank account of the Petitioner.
A bare reading of Section 83 of the Act would show that the Commissioner has to form an opinion that for the purpose of protecting the interest of the Government revenue, it is necessary to provisionally attach either the property or the bank account belonging to the taxable person by passing an order in writing but this exercise can be made by the Commissioner when any proceedings under Sections 62 or 63 or 64 or 67 or 73 or 74 is pending. The Legislature has cautiously used the word “or” for each and every Section of the Act for the purpose of giving powers to the Commissioner to initiate proceedings to provisionally attach the property or the bank account of the taxable person but it is not provided anywhere that the property or the bank account can remain attached under the order passed under Section 83 of the Act if the proceedings initiated under Section 67 is culminated into the proceedings under Section 63 or Section 74 i.e. Assessment of unregistered persons and Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful misstatement or suppression of facts.
The Hon’ble HC held the opinion that, the effect of Section 83 of the Act shall come to an end as soon as the proceedings pending in Sections 63 or 64 or 67 or 73 or 74 are over because pendency of the proceedings is the sine qua non and in case the Commissioner still feels or is of the opinion that it is necessary so to do in the interest of protecting the Government revenue, it still can pass an order in writing to attach any property or even the bank account of the taxable person if the proceedings are initiated in any of the aforesaid provisions and are pending but for the provisions in which the proceedings have earlier been initiated and are over.
Thus, the impugned orders passed by the Respondents were held to be patently illegal specially when the proceedings initiated under Section 67 of the Act had already been over and hence, the impugned orders were set aside with a direction to the Respondents to release the bank account of the Petitioner.
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