GST Update

Desk of CA. Praveen Sharma – 758 Series (CAPS)

Bombay High Court in the Case of Skytech Rolling Mill Pvt. Ltd.

Short Summary – Bombay High Court Judgment on Provisional Attachment of Cash Credit Account under MGST Act (WP. against Order dated 08.05.2025)

Petitioner Challenged:

• The petitioner challenged the provisional attachment of its cash credit account by ICICI Bank under Section 83 of the MGST Act, claiming it was without jurisdiction.

Key Legal Issue:

• Whether a cash credit account, being a borrowing facility (liability), qualifies as “property” liable for attachment under Section 83.

Court's Finding:

• The Court held that a cash credit account is not the property of the account holder, but a loan facility extended by the bank, hence outside the scope of attachment under Section 83.

Supportive Case Laws Cited:

• Relied on Gujarat HC (Manish Scrap Traders) and Calcutta HC (J.L. Enterprises) which quashed similar provisional attachments of cash credit accounts.

Direction to Respondents:

• Respondents were directed to withdraw the attachment order dated 08.05.2025 within 24 hours and notify the bank accordingly.

Jurisdiction under Article 226:

• Despite availability of alternate remedy, the Court invoked writ jurisdiction as the impugned order was held to be without jurisdiction and contrary to settled law.

Petition Allowed:

• Writ Petition was allowed in full, declaring the provisional attachment illegal and quashing the same.

Key Takeaway:

• Cash credit accounts are not attachable under Section 83 of the GST Act as they are liabilities, not the property of the assessee.

LINK: Desk of CA. Praveen Sharma – 758 Series (CAPS)

Regards, Desk of CA. Praveen Sharma – 758 Series (CAPS)
CAPS