In this post we’ll read about the Supreme Court came down hard on the GST (Goods & Services Tax) Department by terming the provisional attachment under GST law as draconian.
GST PROVISION DRACONIAN, SAY SC
- The bench comprising Justices DY Chandrachud and MR Shah, while allowing an appeal against a judgment of Himachal Pradesh High Court stated, the power to order a provisional attachment of the property of the taxable person including a bank account is draconian in nature and the conditions which are prescribed by the statute for a valid exercise of the power must be strictly fulfilled in the matter of Radha Krishan Industries.
- Further the bench observed that, the exercise of unguided discretion cannot be permissible because it will leave citizens and their legitimate business activities to the peril of arbitrary power.
- They were also of the view that power of ordering a provisional attachment must be preceded by the formation of an opinion by the commissioner that it is necessary so to do for the purpose of protecting interest of government revenue.
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The exercise of unguided discretion cannot be permitted because it will leave citizens and their genuine and valid business activities to the risk of arbitrary and subjective power. The commissioner shall not make pre-emptive strikes on the property of the assessee, merely because property is available for being attached. There must be a valid formation of the opinion that a provisional attachment is necessary for the purpose of protecting the interest of the government revenue.
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The bench comprising Justices DY Chandrachud and MR Shah, while allowing an appeal against a judgment of Himachal Pradesh High Court observed that, the exercise of unguided discretion cannot be permissible because it will leave citizens and their legitimate business activitiesto the peril of arbitrary power.
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This post is written by Shreya Taneja
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