2021 (1) TMI 646 - HC - GST

Validity of provisional attachment order - Section 83 of the Central GST Act, 2017 - HELD THAT - In compliance to the order, learned counsel for the respondents has placed on record order dated 05.01.2021 passed by respondent No.1, whereby Loan Account of petitioner bearing No.34410423938 maintained in State Bank of India has been released and objections raised by the petitioner stand rejected - In compliance to the aforesaid reproduced order, learned counsel for the respondents has placed on record order dated 05.01.2021 passed by respondent No.1, whereby Loan Account of petitioner bearing No.34410423938 maintained in State Bank of India has been released and objections raised by the petitioner stand rejected another petition. The petition is disposed of as having been rendered infructuous.

Summary

Issues:
1. Quashing of provisional attachment order under Section 83 of the Central GST Act, 2017
2. Pending adjudication of objections filed by the petitioner
3. Release of the Loan Account by respondent No.1
4. Filing of CWP No.851 of 2021 against the order dated 05.01.2021

1. Quashing of Provisional Attachment Order:
The petitioner, a partnership firm, sought the quashing of a provisional attachment order dated 04.12.2020 under Section 83 of the Central GST Act, 2017, which attached the firm's bank accounts. The petitioner argued that the order was contrary to the provisions of the section and was passed in a mechanical manner. The petitioner had already filed objections under Rule 159(5) of the Central GST Rules, 2017, which were pending adjudication, causing a halt to all business activities. The Court issued notice to respondents No.1 to 4 for further proceedings.

2. Pending Adjudication of Objections:
The Commissioner, CGST, Rohtak (respondent No.1) was directed to decide on the objections filed by the petitioner within one week of the next date of hearing. Until the next hearing or the passing of the order by respondent No.1, the petitioner was permitted to operate their account with respondent No.4, subject to maintaining the existing balance. In compliance with the court's order, respondent No.1 passed an order on 05.01.2021, releasing the Loan Account of the petitioner maintained in the State Bank of India and rejecting the objections raised by the petitioner.

3. Release of the Loan Account by Respondent No.1:
Respondent No.1's order dated 05.01.2021 acknowledged that credit account/loan accounts are not liable to be attached, citing a previous judgment of the Hon'ble High Court of Punjab & Haryana. The order released the State Bank of India account, identified as a Term Loan Account, based on the findings. The objections filed by the petitioner were rejected to that extent, with relief granted in accordance with the findings.

4. Filing of CWP No.851 of 2021:
The petitioner, in response to the order dated 05.01.2021, had already availed the remedy by filing CWP No.851 of 2021. Consequently, the petition was disposed of as having been rendered infructuous, given the actions taken by the parties and the subsequent legal proceedings initiated by the petitioner.