Provisional attachment under section 83- hampers the normal business activities or not – Gujarat High Court

The Hon’ble High Court of Gujarat vide its order dated 17th March 2022 in the matter of Arya Metacast Pvt. Ltd.  & 1 other (s) Vs.  State of Gujarat & 1 other(s) in R/Special Civil Application No. 2787 of 2022 held that provisional attachment under Section 83 should not hamper the normal business activities of the taxable person.  Further, Stock of Goods, Demat Account, current account, mobile phone, laptop cannot be attached provisionally under Section – 83 and ordered for releasing the same.

The writ-applicant in the present matter preferred the writ-application challenging the provisional attachment order passed under the Gujarat Goods and Services Tax Act, 2017.


  • That the writ applicant No. 1 is a private limited company is engaged in manufacture and sale of ingots, having factory situated near Rajkot. The writ applicant No. 2 is the Managing Director of the said company.  The writ-applicant is duly registered under the GST Act, thus is a registered taxable person and has regularly paid output tax for three years i.e., 2018 -2021.
  • The writ-applicant entered into business transactions with genuine dealers, who are registered taxable persons under GST and regarding that placed all the relevant documents on record.
  • A search was carried out at the premises of writ-applicants by the officer of Deputy Commissioner of State Tax, Vadodara, suspecting that the writ-applicant had shown purchase form fictitious firms, thereby disputed the Input Tax Credit availed by the writ-applicant on the ground that the purchases made by the writ-applicant were not found genuine.
  • The writ-applicant duly co-operated with respondents during search, however thereafter three Form GST DRC-22 were served to the writ-applicants by the respondent authority, provisionally attaching (i) Factory Shed & machinery (ii) Plant & machinery (iii) Pollution Control Unit (iv) Stock of Goods (v) Two Demat Accounts (vi) Current Account and apart from these mobile phone, laptop and other documents from the business premise of the writ-applicant were also seized. Hence the present writ-application.


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