Vidhi Tax And Corporate Advocates

15/05/2026

09/04/2026

Cash Credit Accounts Not Attachable as “Property” – Bombay HC Grants Relief
In a significant relief to taxpayers, the Bombay High Court has stayed the provisional attachment of a company’s cash credit account under Section 83 of the MGST Act.
📌 Key Highlights:
• In ASC Power Pvt. Ltd. vs State of Maharashtra, the Court held that a cash credit account is not “property” for the purpose of provisional attachment.
• Relying on its earlier ruling in Skytech Rolling Mill Pvt. Ltd., the Court clarified that a cash credit account represents a borrowing (liability), not an asset of the assessee.
• Therefore, it falls outside the scope of “any property including bank account” under Section 83.
• The Court also emphasized procedural safeguards, noting that authorities failed to record reasons before invoking attachment—making the action legally unsustainable.
• Reliance was placed on the landmark judgment in Radha Krishan Industries v. State of H.P., reinforcing that reasoned orders are mandatory for such drastic measures.
⚖️ Outcome:
The Court found a strong prima facie case and stayed the attachment, granting interim relief to the petitioner.
Next Hearing: April 23, 2026
💡 Takeaway for Professionals:
This ruling strengthens the legal position that provisional attachment powers under GST cannot be exercised mechanically, especially against facilities like cash credit accounts which are not owned assets.

08/04/2026

🚨 GST Margin Scheme – A Smart Relief for Second-Hand Dealers

Under GST, tax is generally payable on the full transaction value. However, the Margin Scheme provides a significant relief by allowing tax payment only on the profit margin.

📌 Applicable to:
✔ Second-hand goods dealers
✔ Scrap traders
✔ Repossessed asset sales

📌 Key Condition:
❗ No Input Tax Credit (ITC) should be claimed on purchase

📊 How it works:
Taxable Value = Selling Price – Purchase Price
👉 Loss? No GST liability

💡 Practical Impact:
This scheme prevents double taxation and improves liquidity, especially in industries like automobiles and used machinery.

⚠️ Important:
Composition dealers cannot separately opt for this scheme, as they already pay tax on turnover basis.

🚛 Critical Insight – Impact in Detention Cases (Section 129):
In many detention proceedings, authorities wrongly compute tax on the full transaction value instead of the margin.

✅ A powerful yet underutilized provision – when applied correctly, it can significantly optimize tax outflow and safeguard businesses during enforcement actions.

06/04/2026

Refex Industries Limited v. State of Maharashtra & Ors.
Writ Petition (L) No. 10353 of 2026 | Bombay High Court | 25.03.2026

Issue
Whether recovery proceedings (including debit of Electronic Credit Ledger) can be initiated before expiry of appeal period under Section 78 of CGST Act.

Held
The Hon’ble Bombay High Court held that:
Recovery action before expiry of 3 months from service of order is prima facie unsustainable
Under Section 78 of CGST Act, recovery can begin only after 3 months, unless:
Specific reasons are recorded for early recovery
In this case:
No reasons were recorded
Hence, department’s action was invalid.

⚠️ Key Takeaway
👉 Recovery before expiry of appeal period is illegal unless justified with recorded reasons
👉 Debit of Electronic Credit Ledger cannot be done mechanically
👉 Strong ground available for writ remedy / stay of recovery