Shubh Corporation Vs State of Maharashtra (Bombay High Court)
In a significant pronouncement, the Bombay High Court has invalidated a provisional attachment order of a bank account belonging to Shubh Corporation, a partnership firm, under Section 83 of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). The Court’s ruling underscored that such a formidable power cannot be exercised without a determined tax liability and concrete material supporting the necessity of the attachment, thereby offering a crucial check on the arbitrary application of this statutory provision by tax authorities.
The challenge was brought forth by Shubh Corporation against an order dated January 27, 2025, issued by the Joint Commissioner of State Tax, which resulted in the attachment of their State Bank of India account. The petitioner, a firm primarily involved in the procurement and export of heavy machinery like JCBs and Excavators, asserted that it conducts no local trading activities and is duly registered with GST authorities.
Background of the Dispute:
The genesis of the dispute traces back to October 16, 2024, when officers from the State Tax Department, led by the Joint Commissioner, initiated a search operation at Shubh Corporation’s business premises in Mumbai, exercising powers under Section 67 of the MGST Act. A concurrent search was also carried out at their additional business location in Shedung, Raigad, where two Backhoe Loaders (JCBs) were reportedly found.
