Cash Credit Account a Liability, Cannot be Provisionally Attached Under GST Law: High Court

A petition was made under Article 226 of the Constitution of India, challenging the action of the GST Department, dated 8 May 2025, under Section 83 of the Maharashtra Goods and Services Tax (MGST Act) whereby the cash credit account of the petitioner with ICICI Bank was attached provisionally.

There was no dispute that the account attached under Section 83 of the MGST Act is a “cash credit account”.

Question with Court: Whether a “cash credit account” can be provisionally attached by exercising the power under Section 83.

Cash credit account is a liability

Section 83 of the MGST Act provides for the provisional attachment of ‘any property, including a bank account belonging to the taxable person’. The cash credit account is a liability which an account holder owes to the bank for availing the loan facility, and therefore, by no stretch of imagination cash credit account can be construed as a property belonging to the account holder/Petitioner. The phrase ‘including bank account’ following the phrase “any property” would mean a non-cash-credit bank account.

A “cash credit account” not governed by Section 83 of the MGST Act, therefore, cannot be provisionally attached.