Whether cash credit facility can be attached by provisional attachment
Cash credit facility is not a debt and hence cannot be attached;
However, writ petition rejected taking note of remedy is available in GST law
Case Reference :  151 taxmann.com 111 (Calcutta)
Technical Trainee – GST
CA Vaibhav Jain
Facts of the Case:
- Department contended that some of the documents of the petitioner were fake and hence ITC should be disallowed and penalty for the same should be
- Notice u/s 83 has been issued by the department to the bank of the petitioner to provisionally attach the cash credit facility.
- Petitioner is a partnership firm.
- State tax officials carried out book and record inspections in accordance with Section 67 of the WBGST Act, and an INS-01 form was issued with proof of fictitious export invoices and false purchases.
- In response, the department filed SCN asking why
- ITC of Rs.57,96,325 (CGST) and Rs.57,96,325 (SGST) should not be disallowed.
- Interest u/s 50(1) should be paid.
- Penalty amounting to Rs.14,49,081 (CGST) and Rs.14,49,081 (SGST) should not be levied.
- Later, the department issued DRC-014 to the petitioner’s bank, attaching the firm’s provisional cash credit facility. However, the petitioner argued in opposition that the cash credit facility is not a debt and cannot be attached unless there is a threat to the interest of Revenue.
In general, a High Court would not accept a Writ Petition under Article 226 of the Indian Constitution if the Act itself provides an aggrieved party with the same relief. The petitioner has sufficient legal authority to object to the release of their bank account under the provisions, thus the High Court is unwilling to grant relief under its writ jurisdiction; the Writ Petition is dismissed.