Placing cash credit accounts under provisional attachment, not permitted

While hearing a petition challenging the vires of attachment placed over the Assessee’s bank account in a bid to recover tax dues, the High Court of Gujarat re-iterated the position taken in a series of judgments, wherein the practice of the Department of placing cash credit accounts under provisional attachments, was strongly deprecated.

With these observations, the Division Bench of Justice Biren Vaishnav & Justice Devan M Desai directed that notice be issued to the parties concerned and deferred the hearing of the matter, with temporary relief being given to the Petitioner.

The Petitioner-Assessee was represented by Mr. Ashutosh Dave, Advocate, whereas the Respondent-Department was represented by Mr. Jyotindrasinh J Vala, Advocate.

The present petition had been filed to challenge communication dated 10.7.2023 in form DRC-22 whereby the Current Account of the Petitioner held with Bank of Baroda had been provisionally attached.

On hearing the contentions of both the parties, the Bench relied on the judgment of this Court in Manish Scrap Traders v. Principal Commissioner and in Vinodkumar Murlidhar Chechani v. State of Gujarat and re-iterated the legal position prescribing attachment of cash credit accounts in a bid to recover taxes.

With these observations, the Bench directed that notice be issued to the parties concerned and allowed ad interim relief till further proceedings took place.

Cause Title: M/s Anjani Cotton Industries Vs Principal Commissioner of Central Goods and Service Tax [Special Civil Application No 13291 of 2023 / 2023-Enterslice-13-HC-Guj-GST]  

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Anjani-Cotton-Industries-verses-Pr-Commissioner-CGST