The Goods and Services Tax (GST) regime in India empowers tax authorities to provisionally attach a taxpayer’s property, including bank accounts, to protect government revenue during ongoing proceedings. This authority, granted under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act), has been a subject of extensive legal scrutiny and debate.
Legal Framework for Provisional Attachment
Section 83 of the CGST Act allows the Commissioner to provisionally attach any property of the taxable person during the pendency of certain proceedings if it’s deemed necessary to protect the government’s interest. The specified proceedings include those under Sections 62 (assessment of non-filers), 63 (assessment of unregistered persons), 64 (summary assessment), 67 (inspection, search, and seizure), 73 (demand for tax not paid or short paid), and 74 (demand for tax due to fraud or willful misstatement). The attachment order remains effective for one year from the date of issuance.
The procedural aspects are detailed in Rule 159 of the Central Goods and Services Tax Rules, 2017 (CGST Rules). This rule mandates that the Commissioner must issue an order in writing, specifying the details of the property to be attached, and serve it to the concerned individual. The affected person has the right to object to the attachment, and upon review, the Commissioner may release the property if it’s no longer liable for attachment.
Judicial Interpretations and Safeguards
Indian courts have consistently emphasized that the power of provisional attachment is extraordinary and should be exercised with caution. The Gujarat High Court, in the case of Valerius Industries vs. Union of India, underscored that such power should not be used as a tool of coercion and must be based on tangible evidence indicating that the taxpayer may evade tax liability.
Furthermore, the Bombay High Court, in its ruling, highlighted the balance between safeguarding revenue and protecting taxpayers’ rights. The court noted that while the government must secure its interests, it should not resort to measures that could paralyze a taxpayer’s business operations without substantial justification.
How to Draft a Reply to a Notice?
When responding to a legal notice, such as a provisional bank attachment under GST, it is crucial to ensure clarity, accuracy, and legal compliance. Below is a structured format to draft a professional and effective reply.
1. Heading & Addressing
- Use your official letterhead (if applicable).
- Date: Mention the date of response.
- To: Address the notice-issuing authority (e.g., GST Commissioner/Department).
- Subject: “Reply to Notice No. [Mention Notice Number] dated [Notice Date]”
2. Reference to the Notice
- Clearly mention the notice number and date.
- State that you are responding to the notice under the relevant GST provisions (e.g., Section 83 of CGST Act, 2017).
3. Introduction & Background
- Identify yourself/your company (mention GSTIN, name, and address).
- Briefly state your business activities and compliance history.
- Confirm receipt of the notice and your willingness to cooperate.
4. Statement of Facts
- Provide a chronological explanation of the events related to the notice.
- Clarify any misunderstandings or factual inaccuracies.
- Attach relevant supporting documents (invoices, bank statements, tax payment receipts, etc.).
5. Legal Arguments
- Cite relevant provisions of GST law, rules, and judicial precedents (if applicable).
- Explain why the bank attachment is unwarranted or excessive.
- Highlight any procedural lapses by the department, such as failure to provide prior intimation or opportunity for a hearing.
6. Relief Sought
- Clearly request the revocation or modification of the attachment.
- Suggest alternatives like furnishing a bank guarantee if required.
- Mention any urgency if the attachment is affecting business operations.
7. Conclusion & Signature
- Express willingness to cooperate and provide further clarifications.
- Request acknowledgment of your reply and a prompt resolution.
- Sign off with:
- Your Name
- Designation
- Company Name
- Contact Information
8. Enclosures
- List all attached documents for reference.
Example Format:
[Your Company Name]
[Your Address]
[City, State, PIN Code]
[Email | Contact Number]
Date: [DD/MM/YYYY]
To,
[Issuing Authority Name]
[Designation]
[Department Name]
[Address]
Subject: Reply to Notice No. [XXXX] Dated [DD/MM/YYYY]
Respected Sir/Madam,
I am in receipt of your notice referenced above regarding the provisional attachment of my bank account under Section 83 of the CGST Act, 2017. I respectfully submit the following response:
[Provide background, legal arguments, and requested relief as per the guidelines above.]
In light of the above facts and legal position, I kindly request you to reconsider the attachment order and revoke the same at the earliest. I am available for any further clarifications and look forward to your response.
Thank you.
Sincerely,
[Your Name]
[Designation]
[Company Name]
[Contact Information]
Enclosures:
- [List supporting documents]
Read More: Sample Request Letter To Unfreeze Bank Account To GST Department
