Case Note & Summary
The petitioner, Navin Vishwanathan, proprietor of M/s. Oriental Facility, filed a writ petition under Articles 226 and 300A of the Constitution of India challenging a communication dated 21st March 2025 issued by Respondent No. 2 under Section 79(1)(c) read with Section 93(1)(a) of the Central Goods and Services Tax Act, 2017 (CGST Act). The impugned communication provisionally attached the petitioner's bank accounts and property without any prior notice or opportunity of hearing. The petitioner contended that the order was passed in gross violation of principles of natural justice and that no show-cause notice was issued before the attachment. The respondents argued that the attachment was necessary to protect revenue interests and that the provisions of the CGST Act do not mandate a prior hearing. The court held that the power of provisional attachment under Section 79(1)(c) is a drastic measure that can seriously affect the business and livelihood of the assessee. Relying on the principle that any deprivation of property under Article 300A must be by authority of law, which includes adherence to natural justice, the court found that the impugned order was passed without any opportunity of hearing and without recording satisfaction that the conditions for attachment existed. The court quashed the attachment order and directed the respondents to release the attached bank accounts and property forthwith. The court also observed that the respondents may proceed afresh after giving due notice and hearing to the petitioner.
Headnote
A) Constitutional Law - Right to Property - Article 300A of the Constitution of India - Deprivation of Property Without Authority of Law - The court examined whether a provisional attachment order under the CGST Act, 2017, which deprived the petitioner of access to his bank accounts and property, could be sustained when no prior hearing was given. Held that any deprivation of property must be in accordance with law, which includes adherence to principles of natural justice. (Paras 2-5) B) Goods and Services Tax - Provisional Attachment - Section 79(1)(c) read with Section 93(1)(a) of the Central Goods and Services Tax Act, 2017 - Requirement of Hearing - The court considered whether the respondent could provisionally attach the petitioner's bank accounts and property without issuing a show-cause notice or affording an opportunity of being heard. Held that the power of provisional attachment is drastic and must be exercised only after complying with natural justice, unless there is an extraordinary urgency justifying an ex parte order. (Paras 6-10) C) Goods and Services Tax - Recovery of Tax - Section 79 of the Central Goods and Services Tax Act, 2017 - Conditions for Attachment - The court analyzed whether the conditions precedent for attachment under Section 79(1)(c) were satisfied in the absence of any finding that the petitioner was likely to dispose of assets to evade recovery. Held that the attachment order was passed mechanically without recording satisfaction as to the existence of such conditions. (Paras 11-15)
Issue of Consideration
Whether a provisional attachment order under Section 79(1)(c) read with Section 93(1)(a) of the CGST Act, 2017, passed without affording prior opportunity of hearing to the petitioner, is valid in law.
Final Decision
The court allowed the petition, quashed the impugned communication dated 21st March 2025, and directed the respondents to release the attached bank accounts and property forthwith. The respondents were at liberty to proceed afresh after giving due notice and hearing to the petitioner.
Law Points
- Natural justice
- Provisional attachment
- Section 79(1)(c) CGST Act
- 2017
- Section 93(1)(a) CGST Act
- Articles 226 and 300A Constitution of India
- Right to be heard
- Ex parte order
