A mechanical or casual exercise of power under Section 83 of CGST Act will dilute the very efficacy of the provisions. This should stop at the earliest.
Section 83 of the CGST Act, 2017 — Provisional Attachment of Bank Accounts—–The petitioner prayed to quash and set-aside the impugned orders dated 28.8.2020 provisionally attaching his bank accounts. A visit was carried out by the flying squad of the respondent department on 11th August 2020. The department is of the view that the purchases made by the applicant are not genuine. This Court on 9th December 2020 directed to lift the provisional attachment of the cash credit account and notice was issued to the respondents so far as the remaining two accounts. The petitioner counsel submitted that the impugned order is not sustainable in law as on the date of the passing of the order of provisional attachment, there were no proceedings pending under Section 67 of the Act. The amount in the two bank accounts aggregates to Rs. 22,065/-. The respondent counsel submitted there is more than a prima facie case against the applicant as evident from the original record so as to warrant order of provisional attachment of the bank accounts. The court observed that having regard to the fact that there is hardly a balance of Rs. 22,065/- in the two bank accounts, they see no good reason to continue the provisional attachment. The court not appreciated mechanically exercising powers of section 83 in each and every matter in which proceedings under Section 67 of the Act are initiated. 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. A mechanical or casual exercise of such power will dilute the very efficacy of the provisions of Section 83 of the Act.
Held that:- The Hon’ble High Court allowed the petition and set aside the impugned order of provisional attachment of the two bank accounts. Further directed the registry to forward one copy each of this judgment to Union of India, New Delhi, to consider issuing appropriate instructions or guidelines, with respect to the exercise of power under Section 83 of the Act, 2017.