GST Attachment: HC refuses Provisional attachment of the goods, stock & receivables pledged with bank for availing cash credit

Gujarat High Court has disapproved the provisional attachment of the goods, stock, and receivables, more particularly, when the entire stock and receivables have been pledged and a floating charge has been created in favour of the Kalupur Commercial Bank Limited for the purpose of availing the cash credit facility with the provisional attachment of the goods, stock and receivables the entire business will come to a standstill.

Court used clause 3.4.5 of the Central Board of Indirect Taxes & Customs (CBIC) Guidelines on GST Procedure for provisional attachment of property. It says that as far as possible, the authority should ensure that the attachment does not hamper the normal activities of the taxable person. It has been clarified that the raw materials and input required for the production of finished goods should not normally be attached by the department.

This Order was passed by Justice J. B. Pardiwala and Nisha M. Thakore.

The Writ Application was filed by Utkarsh Ispat LLP represented by Mr. Avinash Poddar.