GST: Power Draconian Attachment

GST Provisional Attachment Power Draconian on the provisional attachment of Bank Account under GST, to be exercised in compliant of procedure:

Radha Krishan Industries Vs State of Himachal Pradesh (Supreme Court)

Supreme Court in its recent judgment in the case of M/s. Radha Krishan Industries v. State of Himachal Pradesh & Ors. has laid down the law on provisional attachment proceedings in the GST regime.

In his recent judgment in SC has laid down the Law on the Provisional Attachment Proceedings under the GST regime for Radha Krishan Industries c. State of Himachal Pradesh & Ors.

Judge Chandrachud also asked the officers to balance the protection of state income with authentic businesses. “The message must percussion to the actual authorities in order to make the GST Act workable.”

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‘The Parliament aimed to create a citizens-friendly fiscal structure for GST,’ but called it a ‘draconian preemptive strike,’ a temporary attachment. In the event, Radha Krishna Industries vs Himachal Pradesh State was later rejected by the Apex Court.

At the hearing, Justice Chandrachud observed orally that the tax collector should not see all “companies as fraudulent,” and said it was necessary for the country to emerge from this attitude. “You cannot even start attaching property because of the fact that 12-crore tax (by Radha Krishna Industry) is still owing.

It’s understandable if there is any alienation or if the assessee is dissolving or liquidating… But you cannot start attaching and even block receivables simply because you have the account numbers,” the judge said.

The SC Bench added that a tax officer’s evaluation mechanism should be introduced to inculcate accountability. It stated that the tax officer should be made accountable if the huge tax request raised by the tax department is drastically reduced by the appellate tribunal or the Supreme Court.

Judge Chandrachud also asked the officers to balance the protection of government revenue with genuine businesses. “The message must be transmitted to the actual authorities to make the GST Act feasible…”

‘The Parliament aimed to create a citizens-friendly fiscal structure for GST,’ but called it a ‘draconian preemptive strike,’ a temporary attachment. In the case of Radha Krishna Industries vs Himachal Pradesh, the Apex Court subsequently reserved its judgment.

At the hearing, Justice Chandrachud observed orally that the tax collector should not see all “companies as fraudulent,” and said it was necessary for the country to emerge from this attitude. “You cannot even start attaching property because of the fact that 12-crore tax (by Radha Krishna Industry) is still owing.

If there is a loss of assets or if the assessee winds up or winds up, But you cannot start attaching and even block receivables simply because you have the account numbers,” the judge said.

The SC Bench added that

• A tax officer’s evaluation mechanism should be introduced to inculcate accountability.
• It stated that the tax officer should be made accountable if the huge tax request raised by the tax department is drastically reduced by the appellate tribunal or the Supreme Court.