Allowed

Greenfinch Team Management (P) Ltd. v. Union of India

Telangana HC22 Dec 2022WP/44235/2022

Case brief

AI extract

What is this about?

A writ petition challenging the validity of provisional bank account attachment orders under Section 83 of the CGST Act, which had expired prior to the filing of the petition. The court held that the statutory mandate limiting provisional attachment to one year rendered the orders inoperative and quashed them.

What did the court decide?

Provisional attachment orders dated 02.12.2019 and 08.12.2021 were set aside and quashed.

Greenfinch Team Management (P) Ltd. Vs Union of India — GST and Indirect Tax | Telangana HC (2022)

¶1

TIIE TI BLE'I'H F E H

¶2

AND

¶3

THE HON'BLE SRI IUSTICE C.V.BHASKAR REDDY

¶4

\Y .P .Nct.4,tZ35 of 2022

¶5

RI)ER. (Per the ITon'bb rhe ChiefJutriz Ujial tshryan)

¶6

Hcard Mr. Vineeth Chadda, learned counscl irrr thc pctlt.ioner; Mr. G.Pravecn I(umar, learned Dcputy Solicitor (]cnerai of India lor respondent No.1; and Ms. Sapna l{edrh,, lcarncd counsel rcprescncing Mr. B.Narsimha Sarr-nr, Icarnccl counsel for respondents No.2 and 3.

¶7

On 09.12.2022, we had pirssed the following orcie r

¶8

Challenge made in this writ petition is to the provisional attachment of bank account of thc petitioner on 02.1.2.2019 ^nd ^g in on 08.12.2021 under Section 83 of the Central Goods and Serwices 'lax 4ct,2017 .

¶9

Learned counsel for the petitioner submits that by lapse of time, both the provisional attachmcnt -orders are no longer valid as on today;,^'

¶10

Mt. Sarma prays for time either to obtain

¶11

instmcrions or to Ele affidavit.

¶12

List on 22.7 2.2022 figh on board.

..')..

I-earnecl counsel klr rcspondents No.2 and 3 submits ( )11 the basis oi trittcn instnrcuons that investigadons are ongoing against the pctrtiorrcl unclct Scction 67 of thc Cenual Goods and Seniccs Tax Act, 2017 @ricf'lv 'the CGS'| Act' hereinafter) It rvas ftrr that rcrson that thc bank account of the peritioner was l1 provisiorra)1r' atrachccl. II rhc attachmcnt is lifted, there is possibilin, oi pctirioncr r,,.ithclr:rwing thc anrount dcposited in the said bar-rl< accolrnt u'hich n-rat cause prejudice to the interest of the rcspon dents. In this conne ction, she submits that rcspondents sor-rlcl Lilic to fi1c an affidavit.

¶17

Florvcvur, Icarned counsel for thc petitioner submits that Addiuonal l)ircctor^(lencrrl in the Direcrrrate General of GST Intelligence, Flvclcrabad^'Zrnti Unit had provisionally attached the bank accourrt of thc petitioncr maintained with the ICICI bank under Section 83 o[ the CGSI' Act on 02.12.2019. Thereafter, fresh order was passed by the Principal Additional Director General or 08.1,2.2021, provisionally attaching the bank account of the petitioncr rnaintained with the Corporation Bank. i

¶18

I I I

¶19

Learned counsel for the petitioner has referred to subsecuon (2) of Section 83 ol the CCIST Act and submrts that provisional attachment cannot bc continued beyond a period o I ( )flc vear. In this conncction, hc has submitted a corrpilation of judgn'rents of different High Courts supporting the statutorv rnandate cngrafted in Section 83(2) olthe CGST Act.

¶20

Fr<rm thc matcrial papcrs, we find that on 02.1,2.2Uq, r\dcliuonal Dfuector General in the l)irectorate General of^(lS't' I ntelligerrce, Hyderabad Zonal U nit had written to the Rcgronal ()lficer ol ICICI Banl< limrted, Ilvdcrabad staung that petitionrr is a registered taxable person under the CGST Act; proceedinus rvere launched against the pctitioner under Section s 67 Q) and^,' 4 ol the CGST Act; and Directorate General of GST' Intelligcncc had informatiorr that petitioner had current account in ICICI Bank bearing accouflt No.017705009507. In order to protect the intcrcst of rer.cnuc and in excrcisc of the power conferrcd by Secuon 83 of the CGST^{,\ct, Additional} Director General -flovisionallv attached thc aforcsaid bank account clarifying that

¶21

¶22

¶23

no debit woulcl bc aliou,cd to bc made from thc said account or from anv othcr accounr opcratcd b), thc pctitioner rvithout prior permissior-r o1- thc Dircctorrrtc General of GS'I Intelligence. Almost two vears thereaficr, sirnilar provisional attachment was ordercd b), thc i)rincipal ,,\cklitional Dircctor General in respect of account r.io.176001(r(11000233 o[ thc pctitioner maintained with thc^{(iorporattrrr-r} IlanIi in )lvderabad

¶24

Section 83 of rhc^(-( lS'I Act ptovides for provisional attachmcnt to protect relcnrlc in ccrtain cases. Section 83 is extractccl hercunclcr:

¶25

Provisional attachment to protect revenue in certain cases:

¶26

¶27

Where during tl-re pcndcncy of any proceedings under secuon 62 or scction 63 or section 64 or section 67 or section 73 or secrion 74, the^{(-ornn-rissioner} is of the opinion that for the purposc of protecting the interest of the Governrnent revenue, it is necessan so to do, he may, by order in writing attach provisionalll' anl property, including bank account, belonging to the taxal)le pcrson in such manner as may be prescribed.

¶28

(2) Every such provisional artachment shall cease to have effcct after the expiry of a pcriod of one year from the date of the ordcr made under sub-section (1).

¶29

From the above wc find that as per sub-section (1) of Section 83 o[ thc C(lS'f Act, whcre during the pendency o[ any procecdings r-rnder Sections^(r2, 63, 64 67 73 or 74, thc C<;mmissioncr is of the opinion that For the purpose oI protccting the inrercst of the Gr,vernment revenue, it is necessary to do so, hc ma,, b),ord". in writing, attach provisionally an1, propcrry including bank account belonging to the taxable person in such manrler as may be prcscribcd. Sub-section (2) thereof providcs that evcfl, such provisional attachment shall cease to have cffect alter the cxpiry of a period of one year from the date o[ the order madc under sub-scction⁽¹⁾

¶30

¶31

Attachmcnt of bank accoLrrlt of a taxable person is a serious measure which^has the eflect of not only^{adversely affecting} propcrry rights o[ such persort but^is also an^{ifltrusioflinto his} privacy. The power being^{drasric, it has to be exercised by a high} - authoriry like the Commissioner. However, the condition

¶32

::6::

¶33

prccedenl fol cxercisc ,ri such pow'cr is that proccedings undcr Sections 62. 63, 64, 61 ,¹³ or 74 sl.roulcl be pending against the taxable person. Further. thc Commissiorlcr must also form an opinion that tr> protccr thc intcrest of govcrnment revenuc, it is necessary to provisionall\ attach any properN o[ the taxable person includrng the banli account. If thcse tu,o conditions are fulfillecl,^{(-on-rrnission} c r rnal l-1xss an orclcr provisionalll, attaching any properfi' r>f the taxablc ncrson incluclir-rg bank account by making an orclcr in writinq. Ilorvcvcr, bcing a cocrcive provision lcgislature has cnsurccl thet ciuration of provisional attachmcnt does not cxcecd a period oi^()r)c ),car.

¶34

Ry its vcry naturc, provisional attachment cannot be for an

¶35

indefinite pe r:iod. Dictionarl mcaning of provisional is 'arranged or existing for the prescnt, possible to bc changcd later'; Black's Law Dictionary. eighth cdirion, hes de{-rned ir as 'temporary' or \ 'conditional'. I'he rwo words 'provisional' and 'attachment' read in conjunction can onl1, mcan a 'temporary attachment'.

t I

I \

1,1. Thercforc, to ensurc thar the valuable right of a taxable person is not inlringcd ftrr an indefinite period, Iegislature itself 11 has providcd lor definitc rime line in sub-section Q) of Section 83 of the CGS'I' ,\ct mandating that a provisional attachment order rvould har.e a lifc span of only one year kom the date o[ rhe order rradc unclt:r sub section (1). Atter expiry of a pcliod of onc vear, such pror,isional attachment rvould cease to have e ffect.

¶40

Having regard to thc lcgi:rlative mandatc, it is evident that both the provisional attachmcnt orders dated 02.12.2019 and 08.12.2021 have spent their force. Such provisional attachment ordcrs cannot tircrefore bc allowcd to continue beyond the period prescribcd^u nder the statute.

¶41

We howcver make it clcar rhat we have not exprcssed any opinion on the pending procecdings against the^{petitionerunder} Sections 67 (2) and 74 of thc C(lS'f Acl

,1...

::8::

Consequendy, provisional attachment orders

¶46

datcd 02.12.2019 and 08.12,2021 passed by responcicnt No.2 ate hereby set aside and quashcd.

¶47

Since wc have quasheci the provisional attachment orde rs, rcspondent No.2 shall colnrrrunicate the samc to al1 the bankers oI the petiuoncr

¶48

Writ Petition is accordinsiv allorvcd. No cosls.

¶49

As a scquel, miscellaneous peutions, pcnding if any, stand

¶50

SD/-P. GOWRI SHANKAR ASSIST T REGISTRAR

¶51

,TRUE COPY//

¶52

)^ '\ SECTION OFFICER

¶53

To,

¶54

The Secretary Ministry of Finance Department of Revenue Room No. 137, Union of lndia, North Block New Delhi-10000'1

¶55

The Directorate General of Intelligence, Hyderabad Zonal Unit. H.No. .1-1 1- 22214, Lane opp. HDFC Bank Begumpet Hyderabad-50001 6

¶56

One CC to SRI BARKHA BHALLA Advocate [OPUC]

¶57

One CC to SRI GADI PRAVEEN KUI\iIAR (Dy. SOLICITOR GENERAL OF INDIA) Advocate IOPUC]

¶58

Two CD Copies EDS BB IY

HIGH COURT

DATED: 2211212022

ORDER

WP.No.44235 of 2022

l'4r
c a lrtE ST4
<br>ln(
,J 2 4 JAil 2S23 P
t..
)

¶64

ALLOWING OF THE WRIT PETITION WITHOUT COSTS

¶65

r\8\sI

Greenfinch Team Management (P) Ltd. v. Union of India

Case brief

What is this about?

What did the court decide?

Greenfinch Team Management (P) Ltd. v. Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/s. Ashtha Power Corportation Private Limited Vs M/s. Andhara Pradesh Industrial Infrastructure Corportation

M/s. Prasad Film Laborator Pvt. Ltd., Vs The Commissioner of Income Tax-I

Ap. State Seeds Development Corporation, Hyd. Vs the Commissioner of Income Tax-I, Hyd.

Mohd. Rafeeq Ahmed Vs The Union of India

Principal Commissioner of Customs, Vs M/s. Edelweiss Commodities Services Limited

Smt K.Madhavi Vs Union of India