(GST) was being enforced by the tax authorities and has observed that the Taxman cannot see all businesses being fraudulent.
Per the Section 83 of the HP GST Act, during the pendency of tax proceedings, the department can attach any property (including back accounts and accounts receivable.) This is called provisional attachment. It is a protective measure used by tax officers to ensure the satisfaction of a later judgement by the courts.The Apex Court questions the tax officers for stating such huge amounts without accountability. Tax officers ask for huge sum of money from business, without any accountability, the court observed. The court further termed provisional attachment as ‘draconian’ and ‘pre-emptive strike’:
“Tax Authorities can’t start attaching assets unless there’s alienation, winding up or liquidation of assets,” Justice Chandrachud observed.The Court concluded that the officers must strike out a balance between protecting government revenue and allowing genuine businesses to thrive and operate. The SC concluded the hearing after listening to the arguments of both sides and reserved its judgement on the issue.