Facts of the Case

Ashok Kumar Vishwakarma filed this writ petition before the Bombay High Court under Article 226 of the Constitution challenging two provisional attachment orders passed by the Commissioner, CGST & Central Excise, Bhiwandi Commissionerate under Section 83 of the Central Goods and Services Tax Act, 2017. The first order, dated 25.04.2022, attached the petitioner's bank account with HDFC Bank, Bhiwandi Branch; the second, dated 06.04.2023, attached an immovable flat at Kharbav Village, Thane. Both orders were passed while proceedings under Sections 67 and 74 of the CGST Act were pending against the petitioner, on the basis of reports that the petitioner had availed and passed on ineligible Input Tax Credit of approximately Rs.3.21 crore from non-existent/non-genuine persons in contravention of Section 16 of the CGST Act, with the investigation still ongoing.

Issues Involved

  1. Whether the provisional attachment orders under Section 83 of the CGST Act were valid absent recorded formation of opinion based on tangible material.
  2. Whether the writ court should exercise Article 226 jurisdiction to interfere with the attachment orders, or whether the petitioner should first exhaust the objection remedy under Rule 159(5) of the CGST Rules.

Petitioner's Arguments

  • The Commissioner had not formed any independent opinion based on tangible material before ordering provisional attachment under Section 83.
  • Relying on the Supreme Court's decision in M/s. Radha Krishan Industries v. State of Himachal Pradesh & Ors., such an order, passed without due application of mind, breaches principles of natural justice and is liable to be set aside.

Respondent's Arguments

  • The Revenue relied on the recorded findings in the attachment orders themselves, which showed that investigation under Sections 67 and 74 had revealed availment of ineligible ITC of a substantial amount from non-genuine suppliers, justifying provisional attachment during the pendency of investigation.

Court Order/Findings

  • The Court examined both attachment orders and found they were passed in Form GST DRC-22, following investigation that revealed prima facie availment of ineligible ITC of Rs.3.21 crore.
  • The Court distinguished Radha Krishan Industries on facts, noting that the appellant in that case had already invoked Rule 159(5) by filing an objection and had been denied relief, whereas the present petitioner had not yet availed that remedy at all.
  • The Court held that Rule 159(5) of the CGST Rules provides an efficacious alternate remedy, entitling any person whose property is attached to file an objection in Form GST DRC-22A, on which the Commissioner must hear the objector and may release the property in Form GST DRC-23.
  • The Court declined to exercise discretionary jurisdiction under Article 226 to interfere with the attachment orders at this stage, and did not entertain the petition, keeping all contentions open.
  • As the petitioner had bona fide pursued the writ petition, liberty was granted to file an objection under Rule 159(5) within one week, to be decided by the Commissioner without raising any objection as to limitation.

Important Clarification

  • A challenge to provisional attachment under Section 83 CGST Act ordinarily ought to be routed through the statutory objection mechanism under Rule 159(5) of the CGST Rules before invoking writ jurisdiction, particularly where that remedy has not yet been exhausted.
  • Reliance on Radha Krishan Industries is misplaced where the petitioner has not yet made a representation under Rule 159(5); that decision addressed a case where the remedy had already been invoked and rejected.

Sections Involved

  • Section 83, Central Goods and Services Tax Act, 2017 — provisional attachment of property to protect revenue during pendency of proceedings.
  • Section 67, Central Goods and Services Tax Act, 2017 — power of inspection, search and seizure.
  • Section 74, Central Goods and Services Tax Act, 2017 — determination of tax involving fraud, wilful misstatement or suppression of facts.
  • Section 16, Central Goods and Services Tax Act, 2017 — eligibility and conditions for claiming Input Tax Credit.
  • Rule 159, Central Goods and Services Tax Rules, 2017 — procedure for provisional attachment of property, including the objection mechanism under sub-rule (5).

Decision – In Favour of

The petition was not entertained and the attachment orders were left undisturbed, but the disposal was accompanied by a specific direction preserving the petitioner's remedy under Rule 159(5) with a relaxation of the limitation objection. This is best described as disposed of with directions, without a finding on merits — a partial, procedural accommodation for the assessee rather than a clean win for either side.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Bombay
  • Case No.: Writ Petition No. 11326 of 2023
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice G.S. Kulkarni and Hon'ble Mr. Justice Jitendra Jain
  • Decision Date: 04.10.2023
  • Disposal Nature: Petition not entertained/disposed of - provisional attachment under Section 83 CGST Act upheld procedurally; petitioner given liberty to raise objection under Rule 159(5) CGST Rules

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