The attachment of bank account entails serious consequences to the assessee, particularly in the case of a running concern. The power to attach the bank account must therefore be exercised only in strict compliance with the statutory power, and cannot be extended to cover situations which are not expressly contemplated by the section. Absent the statutory precondition for exercise of the power of attachment, any order under Section 83 is wholly illegal and unsustainable.
Section 83 of the CGST Act, 2017—Provisional attachment of Bank Accounts -- The petitioner challenged a communication dated 25.11.2020/01.12.2020 by which the bank account has been attached by respondent under Section 83. The petitioner submitted that the respondent have taken action, pursuant to proceedings initiated under Section 71 of the Act, whereas Section 83 of the Act, on its terms, cannot be invoked in such a situation. The respondent submitted that proceedings were initiated pursuant to a communication from the DGARM. The petitioner was declared as a “risky exporter?, and an attempt was made to elicit certain information and documents from the petitioner. Several communications addressed to the petitioner at its registered office were returned undelivered. Proceedings under Section 71 of the Act were therefore initiated against the petitioner, and the attachment of the bank account under Section 83 of the Act is pursuant to those proceedings. The court observed that no proceedings under any of the provisions mentioned in Section 83 of the Act were in fact initiated against the petitioner.
Held that:-The Hon’ble Court quashed the impugned order dated 25.11.2020/01.12.2020.