GST law: Don't attach bank account unless it's a must

The Gujarat High Court, while allowing a set of petitions moved by businessmen whose banks accounts were attached on the allegations of fraudulently availing Input Tax Credits (ITC) said that such attachments "should not be used as a tool to harass" businessmen unless it is a must.

The division bench of Justices J B Pardiwala and A C Rao quashed the attachment orders and held that "It (attachment) should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee.

The observation came on petitions moved by Pranit Hem Desai, director of Desai Impex Pvt Ltd who was arrested by Directorate General of Central Excise Intelligence, Ahmedabad in March this year, and other litigants.

The agency has alleged that the company procured "invoices of various goods and have passed on ITC fraudulently to the buyers without actual supply of goods.

The court opined that power of attachment of accounts should be used with "extreme care and circumspection."