MANISH SCRAP TRADERS Vs. PRINCIPAL COMMISSIONER

JUDGEMENT

(1.) We have heard Dr. Avinash Poddar, the learned counsel appearing for the writ applicant.

(2.) We started with today's board on a very sad note. The subject matter of challenge in the present writ application is to the order of provisional attachment of a cash credit account running in the name of the writ applicant, maintained with the Axis Bank at Vapi. The impugned order of provisional attachment of the cash credit account has been passed in the Form GST DRC-22 dtd. 29/11/2021. The order has been passed by the respondent No. 1 in exercise of powers under the provisions of Sec. 83 of the CGST Act, 2017. The law as regards the provisional attachment of a cash credit account is no longer res integra. Way back in the year 2016, in the case of Kaneria Granito Ltd. v. Assistant Commissioner of Income Tax, Special Civil Application No. 14497 of 2014 decided on 27/6/2016, a Co-ordinate Bench of this Court took the view that a cash credit account cannot be provisionally attached.

(3.) The cash credit account in the case on hand, could be said to have been opened to enable the writ applicant to borrow the money from the Bank for the purpose of its business. Any money therefore, that the Bank may make available to the assessee would necessarily be in the nature of a loan or a cash credit facility. In either case, it would be in the nature of borrowing by the writ applicant from the Bank. In such circumstances, the Bank and the writ applicant therefore, do not have the debtor-creditor relationship. The decision of this Court in the case of Kaneria Granito Ltd. has been followed in various other matters of the present type over a period of time. Various orders have been passed over a period of time condemning the action on the part of the department in provisionally attaching the cash credit account in exercise of powers under Sec. 83 of the Act.