1.Case Title

Skytech Rolling Mill Pvt. Ltd. vs Joint Commissioner of State Tax Nodal 1 & Others
Writ Petition No. 1928 of 2025
Bombay High Court – Ordinary Original Civil Jurisdiction

2.Summary of Facts

The Petitioner, Skytech Rolling Mill Pvt. Ltd., challenged the provisional attachment of its cash credit account maintained with ICICI Bank, made by Respondent No. 1 (Joint Commissioner of State Tax, Nodal 1, Raigad Division) under Section 83 of the Maharashtra Goods and Services Tax (MGST) Act, 2017. The attachment order was issued via letter dated 8 May 2025, purportedly to protect the revenue interest during proceedings initiated under the MGST Act.

3.Section 83 of CGST act

Section 83. Provisional attachment to protect revenue in certain cases.-

¹[(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.]

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year from the date of the order made under sub-section (1).

4.Key Issues

Whether a cash credit account, which operates as a loan or liability, qualifies as “property” under Section 83 of the MGST Act and can be provisionally attached by the tax authorities.

5.Decision/Outcome

The Bombay High Court quashed the provisional attachment order dated 8 May 2025, declaring it without jurisdiction, arbitrary, and illegal. The Respondents were directed to immediately withdraw the attachment and notify the concerned bank within 24 hours.

6.Reasoning behind the Decision

• The Court held that a cash credit account is not a property or asset of the account holder but a borrowing facility or liability. Hence, it falls outside the purview of "property" under Section 83 of the MGST Act.
• The inclusion of the term "bank account" in Section 83 is intended for operative or savings accounts and not cash credit accounts, which represent a debt rather than an asset.
• The Court relied on judgments from other High Courts, including:
• Manish Scrap Traders vs Principal Commissioner (Gujarat HC)
• J.L. Enterprises vs Assistant Commissioner (Calcutta HC)
• Sargam Foods Pvt. Ltd. vs State of Maharashtra (Bombay HC – under similar municipal legislation)
• Since the attachment was made without legal authority and contrary to well-settled law, the Court exercised its writ jurisdiction under Article 226, overriding the usual rule of alternate remedy.

7.Impact/Implications of the Decision

• Reinforces the principle that cash credit facilities cannot be attached under Section 83, as they are not property of the taxpayer.
• Provides clarity and protection to taxpayers against overreach by tax authorities in provisional attachment proceedings.
• Signals courts’ willingness to intervene where jurisdictional overstep or procedural impropriety is evident, even without exhausting alternate remedies.
• May serve as a reference precedent for similar disputes arising under other State GST regimes or in central GST proceedings.