Facts of the Case

M/s Arramva Corporation (Petitioner No.1), a partnership firm, and its partners Om Sharma and Vishal Jain (Petitioners 2 and 3), were registered under West Bengal GST at Kolkata (GSTIN 19ABHFA3628C1ZO, PAN ABHFA3628C), with a bank account maintained at HDFC Bank, Dr. U.N. Brahmachari Street Branch, Kolkata. They filed WPA No. 19463 of 2023 before the Calcutta High Court challenging a provisional attachment order dated 22.03.2023 passed under Section 83 of the CGST Act, 2017 by the Additional Director General, DGGI, Guwahati Zonal Unit, freezing Bank Account No. 50200052826471. The attachment arose from an investigation into M/s Vishal Metal and Mining Ltd. and M/s NRS Steel Traders, which shared the same Kolkata principal place of business and were found to be controlled by one Ashok Kumar Jain. The petitioner firm was alleged to have availed ineligible ITC of Rs.57,45,619 and passed on ineligible ITC of Rs.1,51,93,800, aggregating Rs.2,09,39,419, per an Alert Notice dated 07.09.2022. The writ was filed on 8 August 2023, nearly five months after the attachment, and decided on 21.12.2023 by Justice Md. Nizamuddin.

Issues Involved

  1. Whether the Calcutta High Court had territorial jurisdiction to entertain a challenge to an attachment order passed by DGGI, Guwahati, over a Kolkata-registered person's Kolkata bank account.
  2. Whether the DGGI, Guwahati officer had jurisdiction to invoke Section 83 absent initiation or pendency of proceedings against the petitioner firm under Chapters XII, XIV or XV of the CGST Act.
  3. Whether the attachment, read with Sections 122(1) and 122(1A) and Rule 159(5) of the CGST Rules, was legal and valid, including on the ground that it was not issued in the prescribed Form GST DRC-22.

Petitioner's Arguments

  • No proceeding under Chapters XII, XIV or XV was pending against the petitioner firm when the attachment was ordered — a condition precedent under Section 83(1) — making the attachment illegal, arbitrary, and without jurisdiction.
  • The power under Section 83 is draconian, to be exercised sparingly and in exceptional circumstances, and cannot be used for a "witch-hunt" based on presumptions or surmises, relying on Radha Krishan Industries v. State of H.P., (2021) 6 SCC 771.
  • The attachment order was not issued in the mandatory Form GST DRC-22 under Rule 159(1)/(2) and was never furnished to the petitioner, rendering it non est in law.
  • The order nowhere indicated that the petitioner was being treated as a "person" under Section 122(1A); this stand was raised only belatedly at final hearing.
  • Merely because one partner was under investigation in connection with other entities did not justify attaching the firm's own bank account.
  • DGGI, Guwahati had no territorial jurisdiction over the petitioner, an exclusively Kolkata-registered taxpayer; the Alert Notice itself only notified jurisdictional authorities to investigate and did not authorise Guwahati to act directly.
  • The writ was maintainable in Calcutta since part of the cause of action — the freezing of a Kolkata bank account of a Kolkata-registered person — arose within this Court's territory, relying on Rajendran Chingaravelu, Om Prakash Srivastava, Nawal Kishore Sharma and connected precedents.

Respondent's Arguments

  • The writ was not maintainable in Calcutta since the impugned action was taken by DGGI, Guwahati, outside this Court's territorial jurisdiction, relying on Bombay Snuff Pvt. Ltd. v. Union of India.
  • Investigation into M/s Vishal Metal and Mining Ltd. and M/s NRS Steel Traders revealed the petitioner firm shared the same principal place of business and was effectively controlled by Ashok Kumar Jain, who admitted this; partner Om Sharma never responded to repeated summons.
  • The petitioner firm was found to have availed ineligible ITC of Rs.57,45,619 from fake/non-existent firms and passed on ineligible ITC of Rs.1,51,93,800 without actual supply, established through RFID e-way bill analytics.
  • DGGI officers have pan-India jurisdiction under Section 6(1) of the CGST Act and applicable notifications/guidelines, so no separate permission was needed for Guwahati officers to act against a Kolkata taxpayer, relying on Bharat Parihar (Bombay HC) and Indo-International Tobacco Ltd. (Delhi HC).
  • The Form GST DRC-22 attachment order was issued as per the prescribed proforma and was legal and valid; in any case, the petitioner had not availed the objection remedy under Rule 159(5) before filing the writ nearly five months after the attachment.
  • The precedents relied on by the petitioner, including Siddhivinayak Chemtech and Radha Krishan Industries, were distinguishable since neither dealt with DGGI's pan-India jurisdiction.

Court Order/Findings

  • On maintainability, the Court held that cause of action is a bundle of facts, and since the petitioner's Kolkata bank account was attached and the petitioner was a Kolkata-registered person, part of the cause of action arose within the Calcutta High Court's jurisdiction, making the writ maintainable despite the order originating from Guwahati.
  • On merits, reading Sections 1(2), 6(1), 83, 122(1) and 122(1A) of the CGST Act together with the cited judgments and the investigation material against the petitioner, the Court held that the DGGI Guwahati authority's provisional attachment was legal, valid, and within jurisdiction, and declined to interfere.
  • The writ petition, WPA No. 19463 of 2023, was accordingly dismissed, with no order as to costs.

Important Clarification

  • DGGI officers, holding pan-India jurisdiction under Section 6(1) of the CGST Act read with relevant notifications, can validly attach the bank account of a taxpayer registered in a different state or zone where investigation material connects that taxpayer to the fraud under probe.
  • A writ court can still have territorial jurisdiction over a Section 83 attachment passed by an authority located elsewhere, so long as part of the cause of action — such as the situs of the attached bank account and the taxpayer's registration — falls within its territory.
  • Non-supply of the attachment order in the prescribed Form GST DRC-22, or belated reliance on Section 122(1A), will not automatically vitiate an attachment if the underlying material otherwise justifies invoking Section 83.
  • Delay in challenging a provisional attachment — here, nearly five months — without availing the statutory objection remedy under Rule 159(5), weakens a subsequent writ challenge.

Sections Involved

  • Section 83, CGST Act, 2017 — provisional attachment of property, including bank accounts, to protect government revenue.
  • Section 122(1) & 122(1A), CGST Act, 2017 — penalties for specified offences, including ineligible ITC availment/passing, and liability of persons retaining the benefit of such transactions.
  • Section 6(1), CGST Act, 2017 — cross-authorisation of officers enabling pan-India action.
  • Rule 159, CGST Rules, 2017 — procedure and prescribed form (DRC-22) for provisional attachment, and objection remedy under Rule 159(5).

Decision – In Favour of

Department — the writ petition was dismissed and the provisional attachment of the petitioner firm's bank account under Section 83 of the CGST Act was upheld as legal, valid, and within jurisdiction, notwithstanding that the Court found the writ itself maintainable in Calcutta.

Related Case Laws

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

Case Details

  • Court: High Court at Calcutta
  • Case No.: WPA No. 19463 of 2023
  • CNR: Not available on record
  • Coram: Justice Md. Nizamuddin
  • Decision Date: 21.12.2023
  • Disposal Nature: Writ petition dismissed

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