Attachment of bank accounts a draconian step, says Delhi HC | Delhi News

NEW DELHI: Delhi High Court has held that attachment of bank accounts is a draconian step and the action can only be taken in a case where conditions specified in Section 83 of the GST Act are fully satisfied.
The bench of Justice Vibhu Bakhru and Justice Amit Mahajan stated in the order, “The exercise of power under Section 83 of the Act must necessarily be confined within the limits of the aforesaid provision.”
The court observed that it is not open for the department to attach the bank accounts of other persons on the mere assumption that the funds were owned by any taxable person.
The petitioners/assessesses, Sakshi Bahl and others, challenged an order passed by the respondent, principal additional director general, Directorate General of GST Intelligence (DGGI), Delhi Zonal Unit (DZU), by which the petitioner’s savings bank account was provisionally attached.
The respondent had attached the petitioners’ bank account in view of the statement made by one Rajiv Chawla during the course of an investigation relating to fake firms involved in passing off fake Input Tax Credits.
According to the petitioners, the funds received by them were in return for advances and loans that were extended by the petitioners.
The petitioners annexed the statement of account which indicated that over a period of nine years, Rs 12.62 crore had been withdrawn from the account of the petitioner in favour of Hindustan Paper Machinery Industry or Rajiv Chawla. The statement also indicates that the petitioner received Rs 6.06 crore.
The court noted that it is not necessary for the court to examine the nature of the payment made by Rajiv Chawla to the petitioners. “However, it is clear that the petitioners are not taxable people. The power under Section 83 of the Act, to provisionally attach assets or bank accounts, is limited to attaching the same of taxable persons and those specified under Section 122(1A),” the court said.

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