1. Rule returnable forthwith. Mr. Utkarsh Sharma, the learned AGP waives service of notice of rule for and on behalf of the respondent no.1; Mr. Amar Bhatt, the learned counsel waives service of notice of rule for and on behalf of the respondent no.4.

2. Draft amendment is allowed. The same shall be carried out at the earliest.

3. The petitioner is registered with the GST authority having its registered address as mentioned in the cause-title. The respondent no.2 alongwith the other officials of GGST had raided the residential premises of the writ-applicant on 19.07.2019. In connection with the investigation of the Heugo Metal, whereby, the respondent no.2 had sealed a drawer in which the files, diary, mobile and laptop were stored and had left the premises and instruct the writ-applicant to appear before him with further details. On 23.07.2019, the respondent no.2 alongwith the other officials had once-again visited the residential premises of the writ-applicant and search actions were undertaken. On 23.07.2019, the respondent no.2 had issued summons upon the writ-applicant to appear before him under the powers conferred under Section-70(1) of the CGST and GGST. The respondent no.2 had passed an order on 23.07.2019 thereby provisionally attached the Current Account bearing No.777705000919 and Saving Account No.231301000919 maintained with the ICICI Bank in exercise of the power conferred under Section-83 of the CGST Act.

4. Being aggrieved by the aforesaid orders of provisional attachment passed by the respondent no.2 produced at Annexures- ‘K’ and ‘L’ respectively of the petition as well as the action of provisional attachment of the Input Tax Credit in the case of the writ-applicant in exercise of power under Rule-86A of the Rules, the writ-applicant has approached this Court invoking the extra-ordinary writ jurisdiction under Article 226 of the Constitution of India.

5. We have heard Mr. Chetan Pandya, the learned counsel appearing for the writ-applicant and Mr. Utkarsh Sharma, the learned AGP appearing for the respondent – State and Mr. Amar Bhatt, the learned counsel with Mr. Kunal Vaishya, the learned counsel appearing for the respondent no.4.

6. Before dealing with the rival submissions of the respective parties, it will be appropriate to refer to relevant statutory provision, which are reproduced as under:-

Section-83 of the CGST Act reads thus:-

Section 83 – Provisional attachment to protect revenue in certain cases –

(1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).

Rule-86A of the CGST Rules reads thus:-

Rule 86A. Conditions of use of amount available in electronic credit ledger.-

(1) The Commissioner or an officer authorised by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as –

a) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36- i. issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or ii. without receipt of goods or services or both; or

b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or 174Inserted vide Notf no. 16/2020-CT dt. 23.03.2020 Page 91 of 164

c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or

d) the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any unutilised amount.

(2) The Commissioner, or the officer authorised by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit.

(3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.]¹⁷⁵ .

7. The orders of provisional attachment under challenge could be said to have been outlived statutory right considering the fact that the orders impugned are dated 23.07.2019 and it would cease to operate on expiry of period of one year as prescribed under Section-83. The same is the position with regard to the Rule-86A of the CGST Rules, 2017, more particularly, Clause-3 which reads as under:-

86A(3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.]¹⁷⁵

8. The attention of this Court is drawn to the draft amendment, whereby, the writ-applicant has referred to the communication dated 28.07.2020 issued by the respondent no.5 as received from the respondent no.2, who seems to have passed the fresh order of attachment. On bare perusal of the said order dated 24.07.2020 produced at Annexure-R and the order dated 27.07.2020 produced at Annexure-Q, even those orders have outlived their statutory life in view of Section-83 of the CGST Act as well as Rule-86A(3) of the CGST Rules, 2017.

9. We finds that, as on date nothing further is required to be adjudicated. Thus, as on date, it could be said that there are no orders of attachment of all the four current accounts running in the name of writ-applicant maintained with the respective banks as well as there is no attachment of the Input Tax Credit.

10. If the Department wants to proceed further in any manner, it is always open for the department to do so in accordance with law.

11. At this stage, Mr. Pandya pointed out that the laptop and a mobile phone of his client was also seized by the authorities of the Department. He invited our attention to Sub-section (7) to Section- 67 of the Act. Section-67(7) reads thus:-

Section-67(7) – Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:

Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months.

12. Thus, after the goods are seized under sub-section (2) to Section 67 and no notice in respect thereof is issued within six months of the seizure, the authority concerned is obliged to return to the person from whose possession such goods were seized. The proviso enables the authority concerned upon showing sufficient cause to extend the period further not exceeding six months. In the case on hand indisputably no notice has been issued and the time period of six months has also expired. In such circumstances, the authority concerned shall look into this aspect also so far as the laptop and mobile phone is concerned.

13. This order is without prejudice to the rights of the department to initiate any further action in accordance with law.

14. With the aforesaid, this writ-application stands disposed of. Rule is made absolute to the aforesaid extent.