Attachment proceedings initiated without issuance of notice u/s 74, deemed inappropriate
Facts of the Case:- The petitioner challenged the legality of the attachment proceedings initiated under Section 83 of the Central GST Act, 2017, arguing that no notice was served under Section 74 of the Act, making the attachment of the petitioner's bank account and Electronic Credit Ledger (ECL) illegal and unjustified.
The Petitioner contended that no notice was served under Section 74 of the Central GST Act, 2017. The attachment proceedings were initiated under Section 83 of the Act, which allows for provisional attachment of property to protect government revenue during specific proceedings under Chapter XII, XIV, or XV. The attachment order for the petitioner's account was issued on 15.03.2024, and the ECL was locked on 18.03.2024.
Held that:- The court noted that search and seizure actions were taken under Chapter XIV, and the provisional attachment followed. Despite the attachment orders, no subsequent proceedings were conducted by the respondents. It was evident from the reply that no notice under Section 74 was issued to the petitioner, affecting the petitioner's business significantly.
The court emphasized that attachment proceedings should be a last resort due to their severe impact on an individual's business. such actions must be followed by logical steps, including issuing a notice under Section 74 if fraud or concealment is suspected. Since no notice was issued and no fraudulent activity was evident, continuing the attachment was deemed inappropriate.
The Court allowed writ petition, and the attachment orders dated 15.03.2024 and 18.03.2024 were revoked. Directed the respondents to release the bank account and Electronic Credit Ledger immediately. However, this order does not prevent the respondents from pursuing appropriate proceedings under the Act if they choose to do so in the future. Respondents are free to conclude their search and seizure proceedings as per the law.
To read the complete judgment 2024 Taxo.online 1110
