The Gujarat High Court quashed the order for provisional attachment of the five bank accounts of a person accused of tax evasion under Section 74(1) of the CGST Act.
The respondent authority empowered under Section 83 of the Act, CGST 2017 ordered the provisional attachment of the petitioner’s bank accounts.
The writ applicant, Mukund Kumar Chauhan has prayed before the court to direct the Respondent authority to immediately remove attachment of 5 Bank Accounts belonging to Petitioner Company.
The Section 83 talks about the opinion which is necessary to be formed for the purpose of protecting the interest of the government revenue. Any opinion of the authority to be formed is not subject to objective test.
The language leaves no room for the relevance of an official examination as to the sufficiency of the ground on which the authority may act in forming its opinion. But, at the same time, there must be material based on which alone the authority could form its opinion that it has become necessary to order provisional attachment of the goods or the bank account to protect the interest of the government revenue.
The use of the word “may” indicates not only discretion, but an obligation to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue.
Therefore, the opinion to be formed by the Commissioner or take a case by the delegated authority cannot be on imaginary ground, wishful thinking, how so ever laudable that may be.
Such a course is impermissible in law. At the cost of repetition, the formation of the opinion, though subjective, must be based on some credible material disclosing that is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue.
The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings. “Belief” is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But if it is challenged that he had no reasons to believe.
The division judge bench headed by Chief Justice Vikram Nath and J.B. Pardiwala in the view of the conditions referred under Section 83 quashed the order of provisional attachment of the five bank accounts of the writ applicant.
Subscribe Taxscan Premium to view the Judgment
