2018 (6) TMI 1493 - AT - Customs

Lifting of attachment of Bank Account - the account have been frozen by Revenue without any demand being persisting against the appellant - Held that - Revenue has to explain the reason why the bank accounts have been attached and whether there is any order against the appellant calling for such mode of recovery passed in the presence of appellant and hearing him. If so, how the enforceability of the order arose and in which proceeding to be informed to Tribunal - The Authority should also explain the initiation of the proceedings and its outcome in his reply. Such reply to reach Tribunal on 24-11-2017.

Summary

Issues Involved:
1. Freezing of bank accounts without serving show cause notice or adjudication order.
2. Violation of natural justice and rule of law.
3. Request for releasing the frozen bank accounts.
4. Requirement for Revenue to explain the reason for attachment of bank accounts.

Analysis:

Issue 1: Freezing of bank accounts without serving show cause notice or adjudication order
The appellant's counsel argued that the bank accounts were attached by the Revenue in 2017 without serving the show cause notice dated 3-1-1993 or the adjudication order dated 11-11-1996 on the appellant. The lack of service of these crucial documents raises concerns about the legality of the attachment and the violation of the appellant's right to be informed and heard in the proceedings.

Issue 2: Violation of natural justice and rule of law
The appellant's representative contended that the attachment of the bank accounts without following the principles of natural justice and without providing an opportunity for the appellant to explain the situation is a clear violation of the rule of law. The failure to grant the appellant a chance to present their case and challenge the attachment undermines the fundamental principles of justice and fairness.

Issue 3: Request for releasing the frozen bank accounts
The appellant sought the release of the frozen bank accounts, emphasizing that if given an opportunity to present their case, they could have explained the dispute and addressed any liabilities. The failure to provide this opportunity has not only affected the appellant's ability to defend themselves but has also impeded the proper resolution of the matter. Therefore, the appellant requested the appellate tribunal to allow the miscellaneous application for the release of the bank accounts.

Issue 4: Requirement for Revenue to explain the reason for attachment of bank accounts
The tribunal directed the Revenue to provide an explanation for the attachment of the bank accounts and clarify whether there was an order against the appellant justifying such action. The Revenue was instructed to detail the proceedings leading to the attachment and the enforceability of any orders in the presence of the appellant. This requirement aims to ensure transparency and accountability in the attachment process and to address any potential procedural irregularities.

In conclusion, the judgment highlights the importance of upholding principles of natural justice, ensuring the rule of law is followed, and providing parties with a fair opportunity to present their case. The directive for the Revenue to explain the basis for the bank account attachment underscores the need for transparency and procedural regularity in such actions.