The short story of the case would be : An provisional attachment of the petitioner’s bank account was ordered by the GST authorities after being suspicious that the company is availing input tax credit(ITC) fraudulently.
On this case, Bombay high court made a judgement that : After analysing Section 83 read with Rule 159(1) and the form GST DRC-22 which mentions about how provisional attachment in certain cases is to be levied, it can be read that Section 83 uses the phrase ‘pendency of any proceedings‘.
The proceedings are referable to section 62, 63, 64, 67, 73 and 74 of the Act only, not others. Thus, the bank account of the taxable person can be attached against whom the proceedings under the sections mentioned above are initiated. Section 83 does not provide for an automatic extension to any other taxable person, against whom the specific inquiry against under section has been initiated.
It is to be noted that the power to provisionally attach bank accounts is a drastic power. Thus, the Courts have emphasized that this power is not to be routinely exercised. U/s 83, the legislature has mentioned to provisionally attach bank accounts in order to safeguard government revenue, but the power must be exercised within the ambit of law.
Thus, the Bombay High Court ruled here that the order by the Directorate General of GST Intelligence of provisionally attaching the bank accounts of the petitioner, was without jurisdiction.