Soraza Recycling Private Limited Vs Union of India And 4 Others (Allahabad High Court)
Allahabad High Court held that initiation of proceedings under section 74 of the Central Goods and Services Tax Act cannot be reason for provisional attachment. Accordingly, provisional attachment notices quashed due to lack of specific reasoning.
Facts- This is a writ petition under Article 226 of the Constitution of India wherein the writ petitioner is aggrieved by the provisional attachment carried out by the revenue with regard to two bank accounts of the petitioner under Section 83 of the Central Goods and Services Tax Act, 2017.
Conclusion- Held that there is no reason provided for the provisional attachment notice and the alleged supportive reason that has been provided is a completely ludicrous one. If the reason that provisional attachment is being done as proceedings have been initiated under Section 74 of the Act is allowed to stand, then in all proceedings wherein show cause notice is issued under Section 74, provisional attachment would become valid. The law as laid down in the abovementioned judgements makes it patently clear that a proper opinion has to be formed based on adequate reasons for such a draconian action to be taken. In the present case, such reasons are definitely lacking and the impugned order is absolutely perverse and arbitrary. In light of the same, both the provisional attachment notices are without any basis in law and are required to be quashed and set-aside. We, accordingly, quash and set-aside the provisional attachment notices dated July 23, 2025.
