2019 (10) TMI 357 - HC - GST

Permission for withdrawal of petition - De-freezing of Bank Accounts - provisional attachment u/s 83 of CGST Act, 2017 - HELD THAT - Petitioners, seeks leave to withdraw the petitions with liberty to file objection in terms of clause (5) of Rule 159 of CGST Rules, 2017 - Leave with liberty as prayed for, is granted. Petition disposed off as withdrawn.

Summary

Issues:
Petition seeking direction to de-freeze bank accounts under Section 83 of CGST Act, 2017 without proper authority, reasons, and post-decisional hearing.

Analysis:
The petitioners filed petitions under Article 226 and 227 of the Constitution of India, seeking directions to de-freeze/withdraw restrictions on their bank accounts in Union Bank of India and Axis Bank. The Additional Commissioner, CGST and Central Excise, Mumbai Central had provisionally attached the accounts under Section 83 of the CGST Act, 2017. The petitioners argued that the orders were passed by the Additional Commissioner, not the Commissioner as required by the Act, lacked reasons, prevented refund crediting, and denied post-decisional hearing.

The learned counsel for the petitioners highlighted several issues with the provisional attachment orders. Firstly, the orders were issued by the Additional Commissioner, contrary to the requirement of Section 83 of the CGST Act, 2017. Secondly, the orders lacked reasons supporting the attachment. Thirdly, the petitioners were unable to receive refunds from the Custom Department due to the frozen accounts. Lastly, the petitioners were not granted a post-decisional hearing, depriving them of an opportunity to present their case.

On the other hand, the counsel for respondent Nos. 1 and 2 argued that the orders under Section 83 only prohibited debit transactions, allowing for the crediting of refunds from the Custom Department. Additionally, it was mentioned that the orders were issued in compliance with FORM GST DRC-22 as per Rule 159 of the CGST Rules. Regarding the lack of post-decisional hearing, it was stated that the petitioners could raise objections, which would be considered by the appropriate authority.

Ultimately, in light of the arguments presented, the counsel for the petitioners sought to withdraw the petitions with liberty to file objections under Rule 159(5) of the CGST Rules, 2017. The court granted the request, allowing the petitions to be disposed of as withdrawn. However, if objections are raised under Rule 159(5), respondent No.1 is directed to decide on them promptly after providing the petitioners with a hearing, in accordance with the CGST Rules, 2017.