Dated 17th October, 2019

 Subsequent judgment of the Apex Court cannot be used to re-open assessment or disturb past assessment which have been concluded-Department cannot be authorised to re-open the assessment, which stood closed on the basis of the law as it stood at the relevant time.

Credit cannot be provisionally blocked under section 83 of CGST as held in the matter of AlFA Enterprise

Facts of the Case

M/s Alfa Enterprise (herein after referred to as “petitioner”) was served with an order under section 83 of the Central Goods and Services Tax Act, 2017 attaching bank account, sealing of godown/office and blocking of credit available in electronic credit ledger as on 01.08.2019 in respect of proceeding launched under Section 83.. The petitioner filed a special leave application against the officer of State of Gujarat before Hon’ble High Court challenging the authenticity of aforesaid order.

Proceedings of the case:

During hearing the learned Assistant Government Pleader accepted non communication of the aforesaid order of attachment to the petitioner.

Upon perusal of the order of attachment dated 3.8.2019 as produced by the respondent, it is found that the same has been issued by the Assistant Commissioner of State Tax, Ahmedabad in respect of proceedings launched against the petitioner under Section 83 of the CGST Act.

Section 83 of the CGST Act provides for provisional attachment of property including bank account of taxable persons to protect the interest of Government revenue in certain cases of pending assessment and demand proceedings. Thus, section 83 of the CGST Act only empowers the State authorities to provisionally attach the property of a taxable person during proceedings initiated under certain Sections mentioned therein. However, no proceedings can be initiated under Section 83 which is a recovery provision. Under the circumstances, it appears that the exercise of powers under section 83 of the CGST Act, whereby the bank account of the Petitioner has been attached is totally without any authority of law.

Insofar as blocking of the credit of Rs.6,63,51,380/- available in the electronic credit ledger of the petitioner on 1.8.2019 by making computer entry is concerned, the learned Assistant Government Pleader even with the assistance of the instructing officer is not in a position to point out any provision of law which empowers the respondent authorities to block the credit. Further in respect of the attachment of godown/office, the learned Assistant Government Pleader has agreed to open the seal.

Judgment of the Hon’ble High Court

Having regard to the fact that the order of attachment of bank account is prima facie without authority of law, as discussed hereinabove, and the order of blocking of credit is not backed by any statutory provision, the Hon’ble High Court directed to forthwith withdraw the attachment of the bank account of the petitioner and to unblock the credit of Rs.6,63,51,380/- available in the electronic credit ledger.

*Final hearing pending as on date

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