Bhavesh Kiritbhai Kalani – 2021 (50) G.S.T.L. 37 (High Court – Gujarat)

Bank account cannot be attached, where no proceeding were pending against the assessee under Section 62,63,64,67,73 and 74 of the CGST Act. 

Facts: In this case, the petitioner received an attachment order from the competent authority under GST and realized that his current account with Central bank of India was freezed by the bank on the direction of the Principal Commissioner of Central GST, Mumbai (i.e the Respondent), and since then he was not allowed to operated the account. Despite his repeated requests, no information was disclosed by the authority as to why the account was freezed.

The Petitioner was orally conveyed that his account was freezed due to voluminous transactions with the third party (M/s Belluxa Trading Company), which is involved in violation of the provisions of the CGST Act. The petitioner moved an application under Right to information Act and then under this court with a grievance that section 83 does not permit the freezing of the third party account for any steps which are needed to be taken against the assessees.

Issue: whether the order provisionally attaching the bank account of the petitioner is within the law, where it is found that no proceedings were pending against the petitioner.

Held: The High Court noted that there being no proceedings under sections 62, 63, 64, 67, 73 or 74, having been initiated or pending against the petitioner. There is no reason to invoke the provisions of section 83 by the respondents for the purpose of provisional attachment of bank accounts of the petitioner. Since the proceedings are initiated by the authorities in connection with the third parties, invocation of powers under section 83 are not available with the respondents. Reliance was also placed on the decision of Valerious Industries Versus Union(Special   Civil   Application   No.   13132   of 2019) wherein the Court extensively examined the scope of section 83 of the CGST Act and stated it arbitrary to freeze the bank account of the third party petitioner under sec 83 of the Act.

Therefore, the Court held that attachment is ordered to be lifted and the petitioner was allowed to operate the bank account.


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