Section 83 of CGST Act doesn’t provide for attaching the property of taxable person based on proceedings against another taxable person

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Kaish impex Pvt Ltd Vs. Union of India & ors

Section 83 read with Rule 159(1) along with form GST DRC-22 lay down a scheme as to how provisional attachment in certain cases is to be levied. Section 83, with the phrase ‘pendency of any proceedings’, referred to proceedings u/s 62, 63, 64, 67, 73 and 74 of the Act and not others.

The bank account of the taxable person can be attached against whom the proceedings under the sections above mentioned above are initiated. Section 83 does not provide for an automatic extension to any other taxable person from an inquiry specifically initiated against a taxable person under these provisions. The format of the form GST DRC-22 also specifies the particulars of a registered taxable person and proceedings against the taxable person indicating a nexus between the proceedings to be initiated against a taxable person and provisional attachment of bank account of such taxable person.

It is therefore not possible to accept the submission of the Respondents that even though specified proceedings have been launched against one taxable person, bank account of another taxable person can be provisionally attached merely based on the summons issued u/s 70 to him.

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Therefore, the Bombay High Court ruled that Section 83 does not provide for attaching the property of taxable person based on proceedings against another taxable person.

The details of this case can be read here : Case file

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