Case Law Details
Jai Shri Banke Bihari Traders Vs Union Of India & Ors (Delhi High Court)
Introduction: The case of Jai Shri Banke Bihari Traders Vs Union Of India & Ors before the Delhi High Court concerns the provisional attachment of cash credit accounts under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioners challenged the order dated 04.08.2022, arguing against the validity of the attachment and highlighting the statutory limitations imposed by the law.
Detailed Analysis
1. Impugned Order: The petitioners contested the order passed under Section 83 of the CGST Act, which provisionally attached their cash credit accounts. They argued that the maximum period for such attachment, as per Section 83(2) of the CGST Act, is one year from the date of the order made under Section 83(1).
2. Ceasing of Operation: The petitioner’s counsel asserted that since the orders had ceased to operate, there should be no obstacle for the petitioners to operate their cash credit accounts. This argument was based on the statutory provision stipulating the duration of such attachments.
3. Concession by Respondents: The counsel for the respondents acknowledged the statutory position regarding the limited duration of attachment orders under Section 83(1) of the CGST Act. They conceded that the orders cease to operate after one year from their issuance.
4. Fresh Attachment Order: However, the respondents passed a fresh attachment order on 13.12.2023, once again provisionally attaching the cash credit accounts. The petitioners contested this action, alleging a breach of statutory provisions and claiming non-receipt of copies of the new attachment order.
5. Disposal of Petition: Considering the admitted fact that the order in question had ceased to operate, the High Court disposed of the petition. It reserved the petitioner’s right to challenge the fresh attachment order dated 13.12.2023 in accordance with the law, while leaving the question of the validity of repeated attachment orders under Section 83 of the CGST Act open.
Conclusion: The Delhi High Court’s disposal of the writ petition highlights the statutory limitations on the provisional attachment of cash credit accounts under the CGST Act. While acknowledging the cessation of operation of the impugned order, the court reserved the petitioner’s right to challenge any further actions by the respondents. This case underscores the importance of adhering to statutory provisions and ensuring procedural fairness in tax matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 04.08.2022 passed under Section 83 of the Central Goods and Services Tax Act, 2017 [“CGST Act”], provisionally attaching the cash credit accounts of the petitioners.
2. Learned counsel for the petitioner submits that maximum period for attachment of cash credit accounts in terms of Section 83(2) of the CGST Act is a period of one year from the date the order is made under Section 83(1) of the CGST Act. He submits that since orders have ceased to operate, there can be no impediment in petitioners operating the cash credit accounts.
3. Learned counsel for the respondents concede to the statutory position that orders passed under Section 83(1) of the CGST Act provisionally attaching the cash credit accounts have a life of only one year and cease to operate after the expiry of period of one year from the date it is made.
4. Learned counsel, however, submits that fresh attachment order dated 13.12.2023 has been passed once again provisionally attaching the cash credit accounts under Section 83(1) of the CGST Act.
5. Learned counsel for the petitioners submits that repeated attachment of cash credit accounts in exercise of power under Section 83 of the CGST Act is in breach of the provisions of Section 83(2) and such exercise could not have been undertaken. He further submits that petitioners have not received copies of attachment order dated 13. 12.2023.
6. In view of the above, admitted position that the order, subject matter of these proceedings has ceased to operate, the petition is disposed of reserving the right of the petitioner to impugn the fresh attachment order dated 12.2023 in accordance with law. The question of validity of repeated issuance of attachment orders under Section 83 of the CGST Act is left open.
7. All rights and contentions of parties are reserved.
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