"Power To Attach Bank Account Can Only Be Exercised In Compliance With Statutory Power": Delhi High Court Quashes GST Authority Order
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Delhi High Court has held that power to attach a Bank Account can only be exercised in strict compliance with statutory power. A Single-Judge Bench of Justice Prateek Jalan was presiding over a challenge to the order of the GST Authority pertaining to Provincial Attachment wherein the Petitioner's bank account had been attached by the Authority under Section 83 of the Goods and...
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Delhi High Court has held that power to attach a Bank Account can only be exercised in strict compliance with statutory power.
A Single-Judge Bench of Justice Prateek Jalan was presiding over a challenge to the order of the GST Authority pertaining to Provincial Attachment wherein the Petitioner's bank account had been attached by the Authority under Section 83 of the Goods and Services Act.
The Court clarified that as attachment of a bank account entailed serious consequences to the assessee, this power could only be exercised in strict compliance with statutory power. Therefore, in the absence of any statutory precondition for the exercise of power of attachment, an order under Section 83 would be illegal.
"…the attachment of bank account entails serious consequences to the assessee, particularly in the case of a running concern such as the petitioner herein. The power to attach the bank account must be exercised only in strict compliance with the statutory power, and cannot be extended to cover situations which are not expressly contemplated in the section".
Advocate Govind Rishi, appearing on behalf of the Petiitoner, submitted that the action of the Respondent was taken under Section 83 of the Act, pursuant to proceedings under Section 71 of the Act, and therefore, the former could not be invoked in such a situation.
On the other hand, Advocate Harpreet Singh, appearing for the Respondent, submitted that the circumstances would have been justified if the proceedings had been initiated under Section 67 of the Act, however, it was conceded that the only provision under which action was taken was Section 71.
The Court clarified that as attachment of a bank account entailed serious consequences to the assessee, this power could only be exercised in strict compliance with statutory power. Therefore, in the absence of any statutory precondition for the exercise of power of attachment, an order under Section 83 would be illegal.
"…the attachment of bank account entails serious consequences to the assessee, particularly in the case of a running concern such as the petitioner herein. The power to attach the bank account must be exercised only in strict compliance with the statutory power, and cannot be extended to cover situations which are not expressly contemplated in the section".
Advocate Govind Rishi, appearing on behalf of the Petiitoner, submitted that the action of the Respondent was taken under Section 83 of the Act, pursuant to proceedings under Section 71 of the Act, and therefore, the former could not be invoked in such a situation.
On the other hand, Advocate Harpreet Singh, appearing for the Respondent, submitted that the circumstances would have been justified if the proceedings had been initiated under Section 67 of the Act, however, it was conceded that the only provision under which action was taken was Section 71.
[Read Order]