The proceeding initiated against the petitioner under Section 83 of the Act is without jurisdiction, as the petitioner does not fall within the ambit of the definition of a ‘taxable person’. The impugned provisional attachment orders are quashed.
Section 83 of the CGST Act, 2017—Provisional Attachment of Bank Accounts —- The petitioner challenged the orders all dated 07.12.2020, whereby her several bank accounts have been provisionally attached. The petitioner was acting as a director on the Board of Directors of a company, between 2006 and 2008 and owns approximately 14.33 % equity shares and was acting as mentor in FY 2019-20. The respondent submitted that the petitioner has availed of the alternate remedy available to it under Rule 159(5) by filing objections under the said Rule. The company has availed ITC to the extent of approximately Rs. 85 crores, based on fake invoices. The respondent had arrested persons, who controlled the entities which furnished fake invoices. The petitioner counsel submitted that the proceeding initiated are without jurisdiction as the petitioner does not fall within the ambit of the definition of a ‘taxable person’; the taxable person being the company and not the petitioner. The principles enunciated in Radha Krishan Industries Case, squarely apply to the instant case. The court observed that the petitioner in her voluntary statement stated that she was paid Rs. 1.50 crores in the FY 2019-2020 for rendering services in her capacity as a mentor/advisor and nothing is placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices. In other words, in the absence of such material, the impugned action concerning provisional attachment of the petitioner’s bank accounts, which is otherwise a “draconian” step, was unsustainable. In the zeal to protect the interest of the revenue, the respondent cannot attach any and every property, including bank accounts of persons, other than the taxable person.
Held that:- The Hon’ble High Court allowed the writ petition and set aside the provisional attachment orders dated 07.12.2020.
The proceeding initiated against the petitioner under Section 83 of the Act is without jurisdiction, as the petitioner does not fall within the ambit of the definition of a ‘taxable person’. The impugned provisional attachment orders are quashed.
Section 83 of the CGST Act, 2017—Provisional Attachment of Bank Accounts —- The petitioner challenged the orders all dated 07.12.2020, whereby her several bank accounts have been provisionally attached. The petitioner was acting as a director on the Board of Directors of a company, between 2006 and 2008 and owns approximately 14.33 % equity shares and was acting as mentor in FY 2019-20. The respondent submitted that the petitioner has availed of the alternate remedy available to it under Rule 159(5) by filing objections under the said Rule. The company has availed ITC to the extent of approximately Rs. 85 crores, based on fake invoices. The respondent had arrested persons, who controlled the entities which furnished fake invoices. The petitioner counsel submitted that the proceeding initiated are without jurisdiction as the petitioner does not fall within the ambit of the definition of a ‘taxable person’; the taxable person being the company and not the petitioner. The principles enunciated in Radha Krishan Industries Case, squarely apply to the instant case. The court observed that the petitioner in her voluntary statement stated that she was paid Rs. 1.50 crores in the FY 2019-2020 for rendering services in her capacity as a mentor/advisor and nothing is placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices. In other words, in the absence of such material, the impugned action concerning provisional attachment of the petitioner’s bank accounts, which is otherwise a “draconian” step, was unsustainable. In the zeal to protect the interest of the revenue, the respondent cannot attach any and every property, including bank accounts of persons, other than the taxable person.
Held that:- The Hon’ble High Court allowed the writ petition and set aside the provisional attachment orders dated 07.12.2020.