Principal Additional Director DGGI empowered to pass order for provisional attachment of Bank Account under Section 83

The Hon'ble Delhi High Court in the case of Nikhil Gupta v. Principal Additional Director General DGGI Gurugram Zonal Unit [W.P. (C) No. 10651 of 2024 dated August 02, 2024] held that the Principal Additional Director, DGGI is empowered to pass the order of provisional attachment of bank account under Section 83 of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Facts:

Nikhil Gupta ("the Petitioner") filed a writ petition challenging the order passed under Section 83 of the CGST Act in Form GST DRC-22 ("the Impugned Order") wherein the bank account maintained by the Petitioner was directed to be provisionally attached. Also, the Petitioner is aggrieved by the blocking of Electronic Credit Ledger ("ECL").

The Petitioner against the Impugned Order has filed objection under Rule 159(5) of the Central Goods and Services Tax Rules but the said reply has not been taken into consideration and no order has been passed pursuant to such objection.

The Petitioner contended that only the Commissioner is empowered to pass the order under Section 83(1) of the CGST Act and in the present case, the Impugned Order was not passed by the Commissioner and the said order has been passed without jurisdiction. Also, it was contended that the said order has been passed without any reason to believe that such order is necessary to protect the interest of the Government Revenue.

Issue:

Whether Principal Additional Director of DGGI is empowered to pass order for provisional attachment of Bank Account under Section 83 of the CGST Act?

Held:

The Hon'ble Delhi High Court in W.P (C) No. 10651 of 2024held as under:

• Observed that, as per Section 83(1) of the CGST Act, only the Commissioner is empowered to pass the order of provisional attachment under Section 83(1) of the CGST Act.
• Further observed that, Section 3(d) of the CGST Act specifically mentions the Commissioner of Central Tax or Additional Director General of Central Tax as the specified classes of officers for the purpose of CGST Act.
• Noted that, the Notification No. 14/2017-Central Tax dated July 1, 2017 specifically empowers the Principal Director General, Goods and Services Tax Intelligence or Principal Director General, Goods and Services Tax to exercise power of the Principal Chief Commissioner.
• Opined that, the contentions made by the Petitioner are not maintainable as the Impugned Order has been passed by the Principal Additional Director General of Goods and Services Tax Intelligence.
• Directed that, the Commissioner should decide the Petitioner objections filed against the Impugned Order expeditiously.

Relevant Provision:

Section 83 of the CGST Act

"Section 83: Provisional attachment to protect revenue in certain cases

(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1)"

Notification No. 14/2017-Central Tax dated July 1, 2017

"G.S.R 818 (E).- In exercise of the powers conferred under section 3 read with section 5 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and section 3 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), 1[the Government] hereby appoints the officers in the Directorate General of Goods and Services Tax Intelligence, Directorate General of Goods and Services Tax and Directorate General of Audit as specified in column (2) of the Table below, as central tax officers and invests them with all the powers under the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 and the rules made there under, throughout the territory of India"

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED