Property of a person who is not a 'taxable person' cannot be attached under Section 83 CGST Act: Delhi High Court

The Delhi High Court has ruled that under Section 83 of the Central Goods and Services Tax Act, the authorities cannot attach property including bank accounts of persons who are not "taxable persons" (Roshni Jaiwal vs CCT)..A Bench of Justices Rajiv Shakdher and Talwant Singh stated, "In the zeal to protect the interest of the revenue, the respondent cannot attach any and every property, including bank accounts of persons, other than the taxable person.".The order was passed in a petition preferred by a former director of the company facing investigations under Section 67 of the Act..The petitioner was also a shareholder in the company and presently associated with it as a "mentor"..The petition was directed against orders by Commissioner of Central taxes, GST, which provisionally attached several bank accounts of the petitioner. .The Court first held the writ petition under Article 226 to be maintainable, ruling that availability of an alternate remedy will not be a bar to entertain the plea. ."The fact that an alternate remedy is available to a litigant is a self-imposed limitation on the Court.. The Court can, and should exercise its powers, under Article 226 of the Constitution, amongst others, in cases where the impugned action or order concerned is without jurisdiction," the Court said. .The Court noted that sub-section 1 of Section 83, in no uncertain terms, provides that provisional attachment could be ordered only with respect to property, including bank account, belonging to "taxable person". .Further, the definition of "taxable person", as set out in Section 2(107) referred to one who is registered or is liable to be registered as per the CGST Act..In this case, the Court said the jurisdictional ingredient of a "taxable person" under Section 83 was missing. .The Court added that no material had been placed before it to show that the concerned officer had applied his mind before triggering the provisions of Section 83 to protect the interest of the revenue..It was also considered that there was no material to link the petitioner with the subject matter for which the company i.e the "taxable person" was being investigated under Section 67. ."In the absence of such material, the impugned action concerning provisional attachment of the petitioner's bank accounts, which is otherwise a “draconian” step, was unsustainable," the Court opined..Accordingly, the provisional attachment orders were quashed..Advocate Harsh Sethi appeared for the petitioner. .Senior Standing counsel Harpreet Singh appeared for the authorities. .[Read Order]