Case Details: Skytech Rolling Mill Pvt. Ltd. Versus Joint Commissioner of State Tax Nodal (2025) 31 Centax 354 (Bom.)
Judiciary and Counsel Details
- M.S. Sonak & Jitendra Jain, JJ.
- Shri Tanmay Phadke for the Petitioner.
- Shri Amar Mishra, AGP for the Respondent.
Facts of the Case
The petitioner challenged the provisional attachment of its cash credit account under Section 83 of the CGST Act and the Maharashtra GST Act. The jurisdictional officer ordered the attachment by invoking the power to provisionally attach ‘any property including bank account’ during the pendency of proceedings. The petitioner contended that the cash credit account is a borrowing facility extended by the bank and constitutes a liability owed by the account holder to the bank, rather than property belonging to the petitioner. It was argued that the phrase ‘including bank account’ in Section 83 refers only to operative bank accounts and not to credit facilities. The matter was accordingly placed before the Bombay High Court.
High Court Held
The Bombay High Court held that a cash credit account is a liability which an account holder owes to a bank and cannot be construed as property of the account holder. It observed that Section 83 of the CGST Act and the Maharashtra GST Act does not extend to loan accounts such as cash credit accounts, as these do not constitute assets of the assessee but rather represent sanctioned limits for borrowing. The Court clarified that the phrase ‘including bank account’ following ‘any property’ in Section 83 applies to deposit accounts and not to cash credit facilities. Consequently, the impugned order of attachment was set aside.
List of Cases Cited
- J.L. Enterprises v. Asstt. Commissioner, State tax — (2023) 8 Centax 128 (Cal.) — Referred [Para 7]
- Manish Scrap Traders v. Principal Commissioner — 2022 (64) G.S.T.L. 482 (Guj.) — Referred [Para 7]
- Sargam Foods Pvt. Ltd. & Anr. v. State of Maharashtra & Ors — [Writ Petition No. 4313 of 2008] — Referred [Para 7]
