Power under GST law to order provisional attachment draconian : Supreme Court
The Supreme Court said, on Tuesday, that the rule of law in a constitutional framework is fulfilled when law is substantively fair
| 21 April 2021 2:19 AM GMT
NEW DELHI: The Supreme Court said, on Tuesday, that the rule of law in a constitutional framework is fulfilled when law is substantively fair, procedurally fair and applied in a fair manner, as it held that the power to order a provisional attachment of property, including a bank account, of a taxable person, under the GST law is draconian in nature .
The top Court emphasised that this power of attachment can t be used as an unguided discretion by the authorities.
The Supreme Court on Tuesday said the rule of law in a constitutional framework is fulfilled when law is substantively fair, procedurally fair and applied in a fair manner, as it held that the power to order a provisional attachment of .
Power to order provisional attachment of property, bank account draconian in nature, says SC
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Last Updated: Apr 20, 2021, 07:44 PM IST
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Synopsis
A bench of Justices D Y Chandrachud and M R Shah said the exercise of the power for 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 the interest of the government revenue.
The Supreme Court Tuesday said the power to order a provisional attachment of the property including bank account of the taxable person is draconian in nature and must be based on tangible material. A bench of Justices D Y Chandrachud and M R Shah said the exercise of the power for 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 the interest of the government revenue.
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The Supreme Court has held that the power of provisional attachment under GST laws must be strictly construed, being a draconian power, and that the same should be exercised only on the basis of tangible material.
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, the Supreme Court observed while interpreting Section 83 of the Himachal Pradesh Goods and Service Tax Act.
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 activities to the peril of arbitrary power.
March 17, 2021
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The Madras High Court has allowed transition of accumulated Tax Deducted at Source (TDS) under the TNVAT regime to set off GST liabilities.
The Court gave the order on a batch of 23 petitions filed by assesses under the Tamil Nadu Goods and Service Tax Act, 2017 (TNGST Act) challenging notices issued by the Commercial Tax Department proposing the denial of transition of credit in respect of TDS in terms of Section 13 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) in ten cases, and orders confirming the proposals, in 13 cases.
Accumulated TDS credit
The common factual position is that all petitioners, in the era of Tamil Nadu VAT, have accumulated credit of TDS and have also been permitted to carry forward the same from year to year. However, the petitioners sought transition of the accumulated TDS into their respective accounts for set off against output tax - GST liabilities. This was denied.