{"id":4679,"date":"2025-07-03T16:20:14","date_gmt":"2025-07-03T10:50:14","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=4679"},"modified":"2025-07-03T16:20:14","modified_gmt":"2025-07-03T10:50:14","slug":"cash-credit-not-property-under-section-83-hc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/cash-credit-not-property-under-section-83-hc","title":{"rendered":"Cash Credit Not &#8216;Property&#8217; Under Section 83 | HC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000400207\/cash-credit-account-is-liability-owed-to-bank-and-not-property-of-account-holder-section-83-does-not-apply-to-such-accounts-hc\">Skytech Rolling Mill Pvt. Ltd. Versus Joint Commissioner of State Tax Nodal (2025) 31 Centax 354 (Bom.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>M.S. Sonak<\/strong> &amp; <strong>Jitendra Jain<\/strong>, JJ.<\/li>\n<li><strong>Shri Tanmay Phadke<\/strong> for the Petitioner.<\/li>\n<li><strong>Shri Amar Mishra<\/strong>, AGP for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>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 \u2018any property including bank account\u2019 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 \u2018including bank account\u2019 in Section 83 refers only to operative bank accounts and not to credit facilities. The matter was accordingly placed before the Bombay High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>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 \u2018including bank account\u2019 following \u2018any property\u2019 in Section 83 applies to deposit accounts and not to cash credit facilities. Consequently, the impugned order of attachment was set aside.<\/p>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=(2023)%208%20Centax%20128%20(Cal.)&amp;itemType=AP\">J.L. Enterprises v. Asstt. Commissioner, State tax<\/a> \u2014 (2023) 8 Centax 128 (Cal.) \u2014 Referred [Para 7]<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2022%20(64)%20G.S.T.L.%20482%20(Guj.)&amp;itemType=AP\">Manish Scrap Traders v. Principal Commissioner<\/a> \u2014 2022 (64) G.S.T.L. 482 (Guj.) \u2014 Referred [Para 7]<\/li>\n<li>Sargam Foods Pvt. Ltd. &amp; Anr. v. State of Maharashtra &amp; Ors \u2014 [Writ Petition No. 4313 of 2008] \u2014 Referred [Para 7]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Skytech Rolling Mill Pvt. Ltd. Versus Joint Commissioner of State&hellip;<\/p>\n","protected":false},"author":8,"featured_media":4684,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-4679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cash Credit Not &#039;Property&#039; Under Section 83 | HC<\/title>\n<meta name=\"description\" content=\"Bombay HC rules Section 83 attachment doesn\u2019t apply to cash credit accounts as they are liabilities, not assets of the account holder. 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