Praful Nanji Satra Vs State of Maharashtra (Bombay High Court)
Under section 83 of the MGST Act, it is the Commissioner which has the competence to carry out provisional attachment of property including bank account subject to fulfillment of the preconditions of section 83. As we have already noticed, the word ‘Commissioner’ is a defined expression under section 2(24) of the MGST Act meaning a Commissioner of State Tax appointed under section 3 which includes Principal Commissioner or Chief Commissioner of State Tax appointed under section 3. The impugned provisional attachment has been carried out by respondent no.3 i.e. Joint Commissioner of State Tax. The record does not disclose any authorization by the Commissioner to the Joint Commissioner to carry out provisional attachment. There is also no averment to that effect in the reply affidavit of the respondents. That apart, section 83 does not provide for such delegation or authorization. The opinion contemplated under section 83 of the MGST Act that to protect the interest of government revenue, it is necessary to provisionally attach any property including bank account has to be necessarily that of the Commissioner. No such opinion of the Commissioner is discernible from the record. Attachment of property including bank account of a person even if provisional is a serious intrusion into the private space of a person. Therefore, section 83 of the MGST Act has to be strictly interpreted.
Since the impugned attachment of bank account has been found to be without jurisdiction, availability of alternative remedy in the form of filing objection under rule 159(5) of the MGST Rules would be no bar to the petitioner from seeking relief under writ jurisdiction. Even here also it is doubtful whether the Joint Commissioner to whom the representation dated 01.07.2020 was addressed could have at all exercised power under rule 159(5) of the MGST Rules when the authority to do so is the Commissioner.
Consequently and in the light of the above, we are of the opinion that the impugned provisional attachment order dated 19.06.2020 cannot be sustained. The same is hereby set aside and quashed. Consequently, respondents are directed to forthwith withdraw the provisional attachment of bank account of the petitioner bearing account No.001101218141 maintained with ICICI Bank Limited, Andheri West Branch, Mumbai.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard Mr. Pande, learned counsel for the petitioner and Ms. Jyoti Chavan, learned AGP for the respondents/State.
2. By fling this petition under Article 226 of the Constitution of India, petitioner seeks quashing of provisional attachment order dated 19.06.2020 issued by respondent no.3 attaching the bank account of the petitioner maintained with the ICICI Bank, Andheri West Branch, Mumbai.
3. Case of the petitioner is that he is a businessman having his office at Dev Plaza, 2nd floor, S.V. Road, Opp. Fire Brigade, Andheri (West), Mumbai- 400 058. There are various other offices carrying on their business from the said address.
4. Petitioner has rented out commercial premises on leave and license basis receiving license fees from the licensees. Since petitioner is required to pay goods and services taxes (GST) on such license fee, he is duly registered with the GST department and submitting GST returns regularly.
5. On 17.01.2020, office of respondent no.2 carried out search operations in the office address of the petitioner in respect of other companies having their offices there, namely, Satra Retail Private Limited, Bleu Noir Infrastructes Private Limited, Prarush Impex and Minaxi Satra Ventures whereafter, summons under section 70 of the Maharashtra Goods and Services Tax Act, 2017 (briefly ‘the MGST Act’ hereinafter) were issued. However, no such search was undertaken against the petitioner and petitioner has not received any summons from the office of respondent no.2.
6. It is stated that petitioner had submitted GST returns till February, 2020 and had accordingly paid GST. However because of Covid-19 pandemic, petitioner had not received any license fee in respect of the rented premises from March, 2020 and accordingly no GST was deposited from March, 2020. Resultantly, petitioner submitted GST return for June, 2020 declaring NIL tax. As it is, respondents had extended the last date for fling of GST return till 31.07.2020.
7. On or about the 3rd week of June, 2020, petitioner came to know that his bank account bearing No.001101218141 maintained with the ICICI Bank, Andheri West Branch, Mumbai, was provisionally attached by respondent no.3. As a result, petitioner was prevented from operating the said bank account.
8. Since petitioner was not served with a copy of the provisional attachment order, a copy of the same was sought for and obtained by him from the ICICI Bank, which shows that petitioner’s bank account was provisionally attached under section 83 of the MGST Act.
9. Though the provisional attachment order mentioned that proceedings have been launched against the petitioner under section 67 of the MGST Act, it is contended that no notice of proceedings under section 67 of the MGST Act has been served upon the petitioner; besides, no such proceedings were pending.
10. Aggrieved by such provisional attachment order of bank account, petitioner submitted detailed representation before respondent no.3 on 01.07.2020, requesting the said authority to withdraw the provisional attachment of bank account forthwith. However, there was no response to the said representation.
11. Aggrieved, present writ petition has been fled seeking the reliefs as indicated above.
12. A common reply affidavit have been fled by respondent nos.1, 2 and 3 through respondent no.3. At the outset, it is stated that petitioner has alternative remedy as provided under rule 159 (5) of the Maharashtra Goods and Services Tax Rules, 2017 (briefy the ‘MGST Rules’ hereinafter) which the petitioner has availed. Since petitioner has availed the said alternative remedy, writ petition would not be maintainable.
12.1. It is stated that proceedings under section 67 of the MGST Act were initiated by virtue of issuance of statutory Form GST INS-01 dated 17.01.2020. As per assignment, Smt. Poonam M. Ombase, Assistant Commissioner of State Tax, Investigating Officer, along with a team of state tax Inspectors visited the place of business of M/s. Prarush Impex. Referring to the provisions of section 67 of the MGST Act, it is stated that after visiting the said premises and carrying out search, it was found out that there is a group of companies which are registered in the same place as that of the petitioner. In all these companies, family members of the petitioner or the petitioner himself are either proprietor/ director/shareholder. They are supplying goods and services to each other and making money transactions with each other. The names of the frms/companies and their proprietors/ directors/ shareholders are as under:
