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Case Summary: Adhunik Corporation Limited &
anr. vs. Superintendent, (DGSTI), Kolkata Zonal Unit & ors.
Court: High Court at Calcutta, Civil Appellate Jurisdiction
Case Number: M.A.T 1233 of 2021 with I.A. CAN 1 of 2021
Date of Order: December 17, 2021
Summary of the Case:
Adhunik Corporation Limited filed an appeal
challenging the provisional attachment of their bank account under Section 83
of the CGST Act, 2017, initiated by the Directorate General of Goods and
Services Tax Intelligence (DGGI). The appellants claimed that the attachment,
made during ongoing proceedings under Section 67, was unjustified and requested
its lifting, citing financial hardship. The High Court ruled in favor of the
appellants, directing the authorities to lift the attachment as the proceedings
under Section 67 had concluded, making the provisional attachment order
ineffective.
Facts of the Case:
·
The DGGI provisionally
attached Adhunik Corporation’s bank account on January 20, 2021, under Section
83 of the CGST Act, during proceedings under Section 67.
·
Adhunik Corporation,
facing financial difficulties due to the attachment, deposited Rs. 10 lakhs but
claimed the continued attachment was unjustified.
·
The proceedings under
Section 67 concluded, and the appellants argued that the attachment should be
lifted since the process was over.
Submissions by the Petitioner (Adhunik
Corporation Limited):
·
The appellants argued
that the provisional attachment should cease as the proceedings under Section
67 had already concluded.
·
They contended that
continued attachment would cause grave financial hardship, especially
considering the economic challenges posed by the COVID-19 pandemic.
Submissions by the Respondent (DGGI):
·
The respondents
maintained that the attachment should continue until the final determination
under Section 74 of the CGST Act.
·
They argued that the
attachment was necessary to protect the government’s revenue interests.
Findings and Decision:
·
The court referred to
the Supreme Court’s decision in **Radha Krishan Industries vs. State of
Himachal Pradesh**, emphasizing that provisional attachment is draconian and
should only be used when absolutely necessary.
·
The court held that
once proceedings under Section 67 are concluded, the provisional attachment
under Section 83 ceases to have an effect.
·
The court quashed the
order of provisional attachment dated January 20, 2021, and the subsequent
communication dated June 14, 2021, instructing the DGGI to lift the bank
attachment.
Conclusion:
The court ruled in favor of
the appellants, lifting the provisional attachment on the bank account. It
reaffirmed that such attachments under Section 83 must be strictly justified
and are only valid during the pendency of specific proceedings. The ruling
emphasized the need to balance revenue protection with the rights and business
continuity of the taxpayers.Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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