Page 90 - GSTL_26th March 2020_Vol 34_Part 4

600 GST LAW TIMES [ Vol. 34
for provisional attachment should take into consideration two things :
(i) whether it is a revenue neutral situation (ii) the statement of “out-
put liability or input credit”. Having regard to the amount paid by
reversing the input tax credit if the interest of the revenue is suffi-
ciently secured, then the authority may not be justified in invoking its
power under Section 83 of the Act for the purpose of provisional at-
tachment.”
10. Applying the above quoted provisions of CGST Act, 2017 and tak-
ing cue from afore-cited judgments of Gujarat High Court, which has noticed
consistent judicial pronouncement and Bombay High Court, we find that in the
present case attached account is Over Cash Credit account and Petitioner had
debit balance of Rs. 6.42 Crore, thus question arises that whether continuation of
attachment would protect interest of revenue or not. The Petitioner is running
unit and more than 100 families are dependent upon Petitioner. Till date no pro-
ceedings under Section 74 of CGST Act are pending which would start as soon as
show cause notice is issued. The Respondent has seized record of the Petitioner
who has further supplied various documents as well put personal appearance
through Directors and employees.
The object and intention of Legislature to endow Commissioner with
power of attachment under Section 83 is very clear. It is drastic and far-reaching
power which must be used sparingly and only on substantive weighty grounds
and reasons. The power should be exercised only to protect interest of revenue
and not to ruin business of any taxable person. Primarily Section 83 permits to
attach property. Property means an asset which may be movable, immovable,
tangible, intangible or in the form of some instrument. Cash in hand as well bank
account is property, in the form of liquidity which is better than immovable
property and directly affects working in the form of working capital of a dealer.
A dealer may be having cash in hand or in account in the form of fixed deposit or
saving account. The mandate of Section 83 in our considered opinion is to attach
amount lying in an account in the form of FDR or saving and it cannot be inten-
tion or purport of Section 83 to attach an account having debit balance. No pur-
pose leaving aside securing interest of revenue is going to be achieved except
closure of business which cannot be permitted unless and until running of busi-
ness itself is prohibited by law. The contention of Respondent that they have
power to attach bank account irrespective of nature of account cannot be counte-
nanced.
We are of the opinion that Respondent can attach an account only if
there is some balance in the form of FDR or savings. The power of attachment of
bank account cannot be exercised as per whims and caprices of the Authority.
The Commissioner is bound to ensure that by attachment of property or bank
account, interest of revenue is going to be protected. In case a property is mort-
gaged with bank and value of property is less than outstanding dues of bank,
provisional attachment is meaningless and action remains only on paper. In the
absence of record showing that interest of revenue is protected by attaching
property or bank account, action deserves to be declared as taken without appli-
cation of mind and formation of opinion on the basis of cogent material. Thus,
attachment of current account having debit balance does not protect interest of
revenue, instead merely ruins the business of a dealer. Such an action of attach-
ment of “over cash credit” account for the sake of recovery of confirmed de-
mand, may in some peculiar case, may be still permitted but not at the stage of
pending investigation.
GST LAW TIMES  26th March 2020  186