Cash Credit Account Cannot Be Treated As Property Of Account Holder Which Can Be Considered U/S 83 Of GST Act: Bombay High Court

In a significant ruling, the Bombay High Court has held that a cash credit account provided by a bank cannot be treated as the "property" of the account holder for the purpose of provisional attachment under Section 83 of the GST Act. The court quashed an order by the GST department that had provisionally attached a company's cash credit facility. It clarified that a cash credit account is essentially a loan facility extended by the bank and the funds in it belong to the bank, not the borrower. The court stated that the power of provisional attachment under the GST law is a drastic measure and can only be used to attach the actual property of the taxable person, such as their bank accounts with a credit balance. This judgment protects businesses from having their crucial credit lines frozen by the tax authorities.