Section 83 does not provide for delegation or authorization; instead, it serves to preserve the government’s interests.: Bombay High Court

 on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(1)IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J.WRIT PETITIONNO.5182 OF 2020Praful Nanji Satra an adult Indian Inhabitant of MumbaiOccupation Business havingresidence address at 701 702 Rehana Heights Chapel Road SantacruzMumbai 400 054....PetitionerVersus1.State of MaharashtraThrough the ofce of Government Pleader High Court Mumbai.2.Commissioner of State Tax having its ofce at 8th Floor GST Bhavan Mazgaon Mumbai 400 010.3.Joint Commissioner of State Tax(Investigation A)having its ofce at C 9 2nd Floor Old Building GST Bhavan Mazgaon Mumbai 400010.…Respondents…Mr. Anand Pande a w Mr. Shobhit Shukla and Ms. Pooja Pande i b AshokR. Pande learned counsel for the Petitioner.Ms. Jyoti Chavan AGP for the Respondents State.... CORAM : UJJAL BHUYAN & MILIND N. JADHAV JJ. RESERVED ON : 08th FEBRUARY 2021 PRONOUNCED ON : 31st MARCH 2021.JUDGEMENT AND ORDER:.Heard Mr. Pande learned counsel for the petitioner and Ms.Jyoti Chavan learned AGP for the respondents State.2.By fling this petition under Article 226 of the Constitution ofIndia petitioner seeks quashing of provisional attachment order dated on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(2)19.06.2020 issued by respondent no.3 attaching the bank account of thepetitioner maintained with the ICICI Bank Andheri West Branch Mumbai.3.Case of the petitioner is that he is a businessman having hisofce at Dev Plaza 2nd foor S.V. Road Opp. Fire Brigade Andheri(West) Mumbai 400 058. There are various other ofces carrying ontheir business from the said address.4.Petitioner has rented out commercial premises on leave andlicense basis receiving license fees from the licensees. Since petitioner isrequired to pay goods and services taxeson such license fee he isduly registered with the GST department and submitting GST returnsregularly.5.On 17.01.2020 ofce of respondent no.2 carried out searchoperations in the ofce address of the petitioner in respect of othercompanies having their ofces there namely Satra Retail Private Limited Bleu Noir Infrastructes Private Limited Prarush Impex and Minaxi SatraVentures whereafter summons under section 70 of the MaharashtraGoods and Services Tax Act 20175182 2020.odt(3)return for June 2020 declaring NIL tax. As it is respondents hadextended the last date for fling of GST return till 31.07.2020.7.On or about the 3rd week of June 2020 petitioner came toknow that his bank account bearing No.001101218141 maintained withthe ICICI Bank Andheri West Branch Mumbai was provisionallyattached by respondent no.3. As a result petitioner was prevented fromoperating the said bank account.8.Since petitioner was not served with a copy of the provisionalattachment order a copy of the same was sought for and obtained by himfrom the ICICI Bank which shows that petitioner’s bank account wasprovisionally attached under section 83 of the MGST Act.9.Though the provisional attachment order mentioned thatproceedings have been launched against the petitioner under section 67of the MGST Act it is contended that no notice of proceedings undersection 67 of the MGST Act has been served upon the petitioner besides no such proceedings were pending.10.Aggrieved by such provisional attachment order of bankaccount petitioner submitted detailed representation before respondentno.3 on 01.07.2020 requesting the said authority to withdraw theprovisional attachment of bank account forthwith. However there was noresponse to the said representation.11.Aggrieved present writ petition has been fled seeking thereliefs as indicated above.12.A common reply afdavit have been fled by respondent on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(4)nos.1 2 and 3 through respondent no.3. At the outset it is stated thatpetitioner has alternative remedy as provided under rule 159of theMaharashtra Goods and Services Tax Rules 2017which the petitioner has availed. Since petitioner hasavailed the said alternative remedy writ petition would not bemaintainable. 12.1.It is stated that proceedings under section 67 of the MGSTAct were initiated by virtue of issuance of statutory Form GST INS 01dated 17.01.2020. As per assignment Smt. Poonam M. Ombase Assistant Commissioner of State Tax Investigating Ofcer along with ateam of state tax Inspectors visited the place of business of M s. PrarushImpex. Referring to the provisions of section 67 of the MGST Act it isstated that after visiting the said premises and carrying out search it wasfound out that there is a group of companies which are registered in thesame place as that of the petitioner. In all these companies familymembers of the petitioner or the petitioner himself are either proprietor director shareholder. They are supplying goods and services to eachother and making money transactions with each other. The names of thefrms companies and their proprietors directors shareholders are asunder: SR.No.Name of FirmName of Proprietor Shareholders1Prarush ImpexProprietor Shri. Rushabh Praful Satra(Son of Petitioner)2Satra Retail Pvt Ltd.Shareholders Shri. Praful Nanji Satra51%5182 2020.odt(5)(Petitioner)Authorized Signatory Shri. Praful Nanji Satra(Petitioner)3Satra Properties(India) Ltd.Director Shri. Praful Nanji SatraSmt. Minakshi Praful Satra(Wife of Petitioner)12.2.It is stated that on prima facie verifcation of the availablerecord of the related group of companies following malpractices havebeen noticed as stated in paragraph 42 of the reply afdavit: “A. That the Petitioner is not keeping the books of account atthe registered place of businessand authorized signatory as per records)has allegedly generated fake e waybill to the tune of Rs. 9.83crore. It is to say that on close scrutiny of e way bills it isfound out that the origin and destination addresses in the e on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(6)way bills are the same. There is a blatant evasion of tax bydisposing of the stock of goods by M s Satra Retail Pvt. Ltdandauthorized signatory as per records).F. Based on the available records tentative liability of otherrelated group of companies in which Petitioner is shareholder authorized signatory and Director is more than Rs. 23 croresapproximatelyof the MGST Rules then respondents were under an obligation to give a hearing to thepetitioner and thereafter to take a decision in the matter. No such hearingwas granted to the petitioner not to speak of any decision taken.13.1.Petitioner has reiterated that to the best of his knowledge noproceedings under sections 62 63 64 67 73 and 74 of the MGST Actwere pending against him. From the reply afdavit of the respondents it isevident that proceedings under section 67 of the MGST Act were initiatedin respect of M s. Prarush Impex with which petitioner is nowhereconnected. That being the position exercise of power under section 83 ofthe MGST Act qua the petitioner is not justifed. Impugned provisionalattachment therefore cannot be justifed. In so far other business entitiesbelonging to the petitioner’s wife or son are concerned it is contended on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(7)that those are distinct business entities having separate legal identity.Thereafter petitioner has given details of his relationship with the entitiesreferred to by the respondents as under: “i. M s. Prarush Impex The entity is a proprietorship businessof the Petitioner’s son Mr. Rushabh Satra and the Petitioner isunconnected to the business.ii. Satra Retail Private Limited The Petitioner is neither ashareholder nor a director in this entity as on date and even onthe date of investigation being carried on 17.01.2020. In fact the Petitioner had resigned as a Director on 16.12.2017 andhad sold his shareholding on 11.07.2019. The Balance Sheetsought to be relied upon by the Respondents does not refectthe presently prevailing facts.iii. Satra PropertiesLtd. The Petitioner was a Directorand is a shareholder of this entity which is presently admittedto the Corporate Insolvency Resolution Proceedings by virtueof an order dated 3rd August 2020 passed by the NationalCompany Law Tribunal Mumbai Bench which order has beenassailed before the Hon’ble National Company Law AppellateTribunal. The company is a separate and distinct legal entityand the Petitioner’s personal bank accounts cannot beattached even if there was a default by the company. Thecontention of the Respondents is contrary to the settledprinciples of the limited liability of the company.iv. Minaxi Satra Ventures The entity is a proprietorshipbusiness of the Petitioner’s wife Mrs. Minaxi Satra and thePetitioner is unconnected to the business.v. Bleu Noir Infrastructure Development Pvt. Ltd. ThePetitioner is neither a Director nor shareholder and is notconnected to the entity in any manner since June 2013.” 14.Both Mr. Pande learned counsel for the petitioner and Ms.Chavan learned AGP for the respondents State have made elaboratesubmissions. While Mr. Pande has assailed the impugned provisional on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(8)attachment as being without jurisdiction as no proceeding under any ofthe sections mentioned in section 83 of the MGST Act was pendingagainst the petitioner and that power under section 83 is to be exercisedsolely by the Commissioner and not by the Joint Commissioner as in thepresent case Ms. Chavan on the other hand has supported the impugnedaction as being just proper and valid. Further Ms. Chavan has producedone fle stated to contain the relevant note sheets and documents from outof the entire original fle for perusal by the Court. On 08.02.2021 the flewas retained for perusal.15.Submissions made by learned counsel for the parties havebeen duly considered. Also perused the materials on record. 16.At the outset it would be apposite to advert to the provisionalattachment order which has been impugned since in this case we are onlyconcerned with the legality and validity of the provisional attachment ofbank account. Date of the order is 19.06.2020 which was howeverreceived by ICICI Bank Limited Andheri West Branch on 23.06.2020.The provisional attachment order was issued under section 83 of theMGST Act and reads as under: “It is to inform that M s. Praful Nanji Satra havingprincipal place of business at 201 2nd Floor DEV PLAZA S.V. Road VileparleMumbai 400 058 bearingregistration number as GSTIN 27AHZPS4559A3ZO PAN AHZPS4559A3 is a registered taxable person underSGST CGST Act. Proceedings have been launchedagainst the aforesaid taxable person under section 67 ofthe said Act to determine the tax or any other amount duefrom the said person. As per information available with thedepartment it has come to my notice that the said personhas a current account in your bank having Account on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(9)No.001101218141Where during the pendency of any proceedings undersection 62 or section 63 or section 64 or section 67 orsection 73 or section 74 the Commissioner is of the opinionthat for the purpose of protecting the interest of theGovernment revenue it is necessary so to do he may byorder in writing attach provisionally any property including on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(10)bank account belonging to the taxable person in suchmanner as may be prescribed.(2) Every such provisional attachment shall cease to haveefect after the expiry of a period of one year from the dateof order made under sub sectionof section 83 what isnoticeable is that during pendency of any proceedings under sections 62or 63 or 64 or 67 or 73 or 74 the Commissioner should be of the opinionthat for the purpose of protecting the interest of the government revenue it is necessary to provisionally attach any property including bank accountbelonging to the taxable person he may do so by making an order inwriting. On a proper analysis of the said provision we fnd that thefollowing conditions are essential to clothe jurisdiction upon theCommissioner for exercising power under section 83. These are :1.Pendency of any proceedings under sections 62 or 63 or64 or 67 or 73 or 74 2.Commissioner should form an opinion that for protectingthe interest of government revenue it is necessary to provisionallyattach any property including bank account belonging to thetaxable person 3.In such a case Commissioner may do so by making anorder in writing.20.Reading the provisions of sub sectionof section 83 as awhole what is further deducible is that the pending proceedings should berelatable to the taxable person because it is the property of the taxableperson which is sought to be provisional attached.21.Sub sectionof section 83 provides that such provisional on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(11)attachment shall cease to have efect after the expiry of a period of oneyear from the date of order made under sub sectionof the MGST Act defnes ‘Commissioner’to mean the Commissioner of State Tax appointed under section 3 andincludes the Principal Commissioner or Chief Commissioner of State Taxappointed under section 3. Though appointment of the Commissioner ismade by the State Government under section 3 under sub sectionofsection 5 the Commissioner may delegate his powers to any other ofcerwho is subordinate to him subject to such conditions and limitations asmay be specifed by him.23.Since provisional attachment of the bank account of thepetitioner has been made on the ground that proceedings have beenlaunched against M s. Praful Nanji Satra under section 67 of the MGSTAct to determine the tax or any other amount due from the said person itmay be useful to briefy dilate on section 67 of the MGST Act. Sub sectionis the essence of section 67 and it says that where the properofcer not below the rank of Joint Commissioner has reasons to believethata taxable person has suppressed any transaction relating tosupply of goods or services or both or the stock of goods in hand or hasclaimed input tax credit in excess of his entitlement under the MGST Actor has indulged in contravention of any of the provisions of the MGST Actor the rules made thereunder to evade tax under the MGST Act oranyperson engaged in the business of transporting goods or an owner oroperator of a warehouse or a godown or any other place is keeping goods on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(12)which have escaped payment of tax or has kept his accounts or goods insuch a manner as is likely to cause evasion of tax payable under theMGST Act he may authorise in writing any other ofcer of State tax toinspect any places of business of the taxable person or the personsengaged in the business of transporting goods or the owner or theoperator of warehouse or godown or any other place.24.Having noticed the above we may now peruse the recordproduced by the learned AGP.25.As per note sheet we fnd that premises of M s. PrarushImpex was visited by the investigation team from 17.01.2020 to21.01.2020. During the course of investigation and search 5 other frmswere found in the same premises including that of the petitioner i.e. M s.Praful Nanji Satra. The record contains Form GST INS 1 which is anauthorization for inspection or search. The authorization was given by theDeputy Commissioner of State TaxINV A Mumbai toSmt. Poonam Ombase Assistant Commissioner of State Tax and ShriUttam K. Bodhgire Assistant Commissioner of State Tax to visit thepremises of M s. Prarush Impex on 17.01.2020. This authorization isdated 16.01.2020. There is one summons to witness issued by Smt.Poonam Ombase Assistant Commissioner of State Tax on 21.01.2020summoning the petitioner Shri Praful Nanji SatraM s. SatraRetail Private Limited to give evidence and to produce documents beforethe Assistant Commissioner of State Tax08 Mumbaiimmediately in proceedings of investigation under section 67 of the MGSTAct and section 64 of Maharashtra Value Added Tax Act 2002 in thecase of M s. Satra Retail Private Limited for the period from 01.07.2017 to on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(13)till date. This summons to witness was issued under section 70 of theMGST Act read with the section 14 of the Maharashtra Value Added TaxAct 2002 and section 30 of the Civil Procedure Code 1908.26.From the above it is evident that the search and resultantinvestigation was carried out in respect of M s. Prarush Impex.Authorization under section 67 was given in respect of M s. PrarushImpex that too by an ofcer of the rank of Deputy Commissioner thoughas per section 67 such authorization should be by a proper ofcer notbelow the rank of Joint Commissioner There is no such authorizationunder section 67 of the MGST Act in respect of M s. Praful Nanji Satra.Shri Praful Nanji Satra was summoned under section 70 of the MGST Actto tender evidence as a witness in connection with proceedings undersection 67 of the MGST Act and section 64 of the Maharashtra ValueAdded Tax Act 2002 in the case of M s. Satra Retail Private Limitedwhich prima facie is a diferent business entity distinct from M s. PrafulNanji Satra. Thus it is evident that there was no proceeding against M s.Praful Nanji Satra or against Shri Praful Nanji Satra under section 67 ofthe MGST Act. If that be so then invocation of power under section 83 ofthe MGST Act against the petitioner would not be justifed. On thisground alone the impugned provisional attachment of the bank account ofthe petitioner is liable to be interfered with.27.However there is one more aspect which we would like todeal with before parting with the record. Under section 83 of the MGSTAct it is the Commissioner which has the competence to carry outprovisional attachment of property including bank account subject tofulfllment of the preconditions of section 83. As we have already noticed on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(14)the word ‘Commissioner’ is a defned expression under section 2(24) ofthe MGST Act meaning a Commissioner of State Tax appointed undersection 3 which includes Principal Commissioner or Chief Commissionerof State Tax appointed under section 3. The impugned provisionalattachment has been carried out by respondent no.3 i.e. JointCommissioner of State Tax. The record does not disclose anyauthorization by the Commissioner to the Joint Commissioner to carry outprovisional attachment. There is also no averment to that efect in thereply afdavit of the respondents. That apart section 83 does not providefor such delegation or authorization. The opinion contemplated undersection 83 of the MGST Act that to protect the interest of governmentrevenue it is necessary to provisionally attach any property includingbank account has to be necessarily that of the Commissioner. No suchopinion of the Commissioner is discernible from the record. Attachment ofproperty including bank account of a person even if provisional is aserious intrusion into the private space of a person. Therefore section 83of the MGST Act has to be strictly interpreted.28.Since the impugned attachment of bank account has beenfound to be without jurisdiction availability of alternative remedy in theform of fling objection under rule 159(5) of the MGST Rules would be nobar to the petitioner from seeking relief under writ jurisdiction. Even herealso it is doubtful whether the Joint Commissioner to whom therepresentation dated 01.07.2020 was addressed could have at allexercised power under rule 159(5) of the MGST Rules when the authorityto do so is the Commissioner.29.Consequently and in the light of the above we are of the on 31 03 2021 on 02 04 WP(L) 5182 2020.odt(15)opinion that the impugned provisional attachment order dated 19.06.2020cannot be sustained. The same is hereby set aside and quashed.Consequently respondents are directed to forthwith withdraw theprovisional attachment of bank account of the petitioner bearing accountNo.001101218141 maintained with ICICI Bank Limited Andheri WestBranch Mumbai.30.Writ petition is accordingly allowed. However there shall beno order as to costs. 31.Record produced be returned back. [MILIND N. JADHAV J.][UJJAL BHUYAN J.]Mujaheed 

Summary: Section 83 expressly prohibits any delegation or permission. The Commissioner’s view, as contemplated by Section 83 of the MGST Act, that it is appropriate to provisionally bind some land, even bank accounts, in order to safeguard the interests of government revenue. As a result, invoking any provision under the MGST Rules cannot be justified if the petitioner is prevented from obtaining redress or an alternative solution. This auspicious judgment was passed by The High Court of Judicature at Bombay in the matter of Praful Nanji Satra Vs the State of Maharashtra and 2 Ors. [W P (L) NO.5182 OF 2020] by Ujjal Bhuyan and Milind N. Jadhav. The Petition was filed under “Article 226 of the Constitution of India, petitioner seeks to quash of provisional attachment order issued by respondent No.3 attaching the bank account of the petitioner maintained with the ICICI Bank.” The case of the petitioner is that he is a businessman Situated in Andheri, Mumbai. He has various other businesses registered at the same address and he has also has rented out commercial premises on a leave and license basis receiving license fees from the licensees. Since the petitioner is required to pay goods and services taxes (GST) on such license fee, he is duly registered with the GST department and submitting GST returns regularly. Office of state tax carried out a search at the home address and summons were also issued under S.70 of MGST Act. Since, the same account was linked with GST and ICICI Bank, on or about the 3rd week of June 2020, the petitioner came to know that his bank account maintained with the ICICI Bank, which was being prevented from operating the said bank account. Aggrieved by such incident’s petitioner submitted a request to said authority to withdraw the provisional attachment of bank account forthwith. However, there was no response to the said representation. The court opined that the search and resultant investigation should be by a proper officer not below the rank of Joint Commissioner. There is no such authorization under section 67 of the MGST Act in respect of M/s. Praful Nanji Satra that he was being summoned under section 70 of the MGST Act to tender evidence as a witness in connection with proceedings. “The opinion contemplated under section 83 of the MGST Act that to protect the interest of government revenue, it is necessary to provisionally attach any property including bank account has to be necessarily that of the Commissioner. No such opinion of the Commissioner is discernible from the record. Attachment of property including the bank account of a person even if provisional is a serious intrusion into the private space of a person. Therefore, section 83 of the MGST Act has to be strictly interpreted.”