Provisional attachment cannot be done in the absence of valid pendency of proceeding
Facts and Issue of the Case
Respondent was engaged in the supply of renting of immovable property and had not discharged its GST liability. The Appellant issued a letter asking the Respondent to furnish certain documents. The appellants having invoked Section 83 of the Central and Service Tax Act, 2017 [‘Act’ for shot] by issuing provisional attachment notice dated 30.03.2019 [Annexure-L to the writ petition], the respondent – assessee has preferred writ petition contending that the ingredients stated under Section 83 would not attract. The learned Single Judge having examined the proceedings initiated under Section 83 of the Act vis-àvis the provisions of Section 83 has come to the conclusion that none of the requirements contemplated under Section 83 of the Act being satisfactorily found, allowed the writ petition. . The Ld. Single Judge carefully examined the proceedings and concluded that the requirements of provisional attachment were not fulfilled, and accordingly, the Respondent’s writ petition was allowed. Being aggrieved, the Appellant preferred a writ appeal before the High Court.
Observation of case
The observation of case Learned counsel for the Revenue inviting the attention of the Court to Annexure-D letter dated 27.08.2018 issued by the Superintendent [PREV], office of the Commissioner of Central Tax, submitted that the said letter is nothing but the notice/proceedings initiated under Section 74 of the Act. Pursuant to the said proceedings initiated, summons to witnesses were issued as per letter dated 17.10.2018 [Annexure-E]. In such circumstances, the learned Single Judge ought not to have held that no proceedings under Section 74 of the Act were pending to invoke Section 83 of the Act. Learned counsel further submitted that according to the statement submitted by the respondent, no GST liability was discharged since November-2017. The respondent being involved in the supply of renting of immovable property i.e., the incidence of both service and supply, the provisions of Section 13[a] of the Act is applicable. However, the respondent has failed to pay GST though issued the invoices to the service receiver. Based on the intelligence report vide letter dated 27.08.2018, the proceedings under Section 74 of the Act were initiated.
Learned counsel of the respondent would submit that none of the requirements of Section 83 of the Act as it stood during the relevant period were satisfied to invoke Section 83 of the Act. The letter dated 27.08.2018 cannot be construed as the notice of proceedings initiated under Section 74 of the Act as contended by the Revenue. Having regard to these aspects, the learned Single Judge has rightly held that no ingredients of Section 83 of the Act is found to have been complied with. Hence, allowed the writ petition rejecting the contention of the Revenue and the same has to be confirmed by this Court, rejecting the writ appeal
Learned counsel further submitted that the show cause notice dated 29.06.2020 has been issued by the Revenue under Section 74 of the Act relating to the period April 2019 to February 2020 and the assessment orders are passed for the months May, June, July 2020. The respondent-assessee has preferred W.P.No.3955/2021 against the said show cause notice and three assessment orders are passed. Hence, this Writ appeal relating to the provisional attachment notice does not survive for consideration.
The High Court held that that no documentary evidence had been placed on record by the Appellan to show that the proceedings were initiated u/s 74 of the CGST Act, 2017 to pass a provisional attachment order u/s 83 of CGST Act, 2017. Moreover, it is settled lav that where the Act specifically provides the requirement for invoking Section 83 of CGST Act, 2017, it ought t be complied with strictly. Merely referring to a letter tha does not refer to section 74 of CGST Act, 2017 cannot b presumed as pending proceedings u/s 74 of CGST Ad 2017 to initiate provisional attachment u/s 83 of CGS Act, 2017. Thus, the writ appeal was dismissed in favour of respondent