GUJ HC Suggestion to GST Dept Regarding Attaching Accounts of Firms

Concerning the case of the Central Goods and Service Tax Act (CGST Act), the central government has been questioned by the Gujarat High court to initiate the step to stop the threats on bank accounts of persons post to the GST council raids on the tax theft.

With respect to the GST council Get to know the details about GST council and how it works for GST implementation in India? We also describe its constitution, functions, quorum and decision-making. Read more, the high court is issuing the order concerning the litigations which has arrived against the department. The council should apply their mind effectively prior to the implementation of the action such as attaching accounts of companies.

“We have noticed over a period of time that in each and every matter, in which proceedings under Section 67 of the Act are initiated, an order of provisional attachment of the bank accounts under Section 83 of the Act would follow. This mechanical exercise of power is not appreciated. The Legislature has thought fit to confer upon the authority the power to provisionally attach the property of the assessee in the hope that such power is not exercised casually but, only after due and proper application of mind,” and has seen by the Justices J B Pardiwala and I J Vora.

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“A mechanical or casual exercise of such power will dilute the very efficacy of the provisions of Section 83 of the Act. Every day, there are no fewer than 10 matters on the subject of Section 83 of the Act in the cause-list. When there are a plethora of judgments explaining Section 83 of the Act in detail, then why so much litigation in the High Court. The only reason that can be attributed is the mechanical exercise of power under Section 83 of the Act. This should stop at the earliest. So much judicial time is wasted in all such matters wherein the law is so well settled”

“We request the Union of India as well as the CBDT to read this judgment thoroughly and consider issuing appropriate instructions or guidelines at the earliest with respect to the exercise of power under Section 83 of the Act, 2017.”

An application has been heard by the court through the city-based firm Chechani Trading Company which is employed in trading ferrous as well as nonferrous metal scrap.

On August 11, 2020, a sudden visit was executed through the flying of the council at the companies campus, and later its bank accounts were then ordered to get attached. The action was defended to the high court.

“The orders are very cryptic and those do not reflect any application of mind. In the absence of assessment, the quantum of demand cannot be determined precisely and, therefore the action of attaching the bank accounts for protecting the interest of the Revenue is absolutely illegal.”