Order of provisional attachment not sustainable if passed without recording opinion & referring to tangible material: HC

Case Details: Varun Gupta v. Union of India - [2022] 143 taxmann.com 396 (Allahabad)

Judiciary and Counsel Details

• • Surya Prakash Kesarwani & Jayant Banerji, JJ.
  • Alok Saxena for the Petitioner.
  • A.S.G.I. & Sudarshan Singh for the Respondent.

Facts of the Case

The petitioner has earlier filed writ petition filed for quashing provisional attachment as proceedings were not pending. The High Court allowed the petition and quashed the order of provisional attachment. However, the second order on provisional attachment was passed immediately by Commissioner. The petitioner again filed writ petition to quash such second order directing provisional attachment of bank account.

High Court Held

The Honorable High Court noted that no proceedings under section 74 of CGST Act had been initiated. The Commissioner had passed impugned order without recording his opinion and referring to tangible material which necessitated him to pass order so as to protect interest of revenue. The impugned order failed to fulfil ingredients of section 83 and the same had been passed in arbitrary and illegal manner and also against the Supreme Court decision in case of Radha Krishan Industries [2021] 127 taxmann.com 26 (SC). Therefore, the impugned order was not sustainable and liable to be quashed. Also, the Court held that the costs of Rs. 50,000 to be imposed on department and shall be paid to petitioner.