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2021 (2) TMI 559 - HC - GSTSeeking grant of anticipatory bail - legality of the attachment order of bank accounts - allegation is that only bills were received without receiving any goods - HELD THAT - Issue Notice. The petitioners have already deposited ₹ 2.5 crores with the respondent's department. List on 18.03.2021. Reply be filed by the respondent within 4 weeks with advance copy to the petitioners.
Issues:
1. Application for grant of anticipatory bail under Section 438 of Cr.P.C. 2. Legality of attachment order under Section 83 of the Goods and Services Tax Act 2017. 3. Cooperation in investigation and readiness to deposit funds. 4. Interpretation of relevant legal provisions regarding excess Input Tax Credit (ITC). 5. Comparison with similar judgments by other High Courts. Issue 1: Application for Anticipatory Bail The petitioners filed an application seeking anticipatory bail under Section 438 of the Cr.P.C. The petitioners claimed to be engaged in the sale and purchase of non-ferrous metals and registered with the Registrar of Companies. They alleged that their premises were searched by officers of the Directorate General of Goods & Services Tax Intelligence, leading to the attachment of their bank accounts under Section 83 of the GST Act without prior notice. Issue 2: Legality of Attachment Order The petitioners raised concerns about the legality of the attachment order issued by the respondent without informing them. They made representations to the respondent questioning the attachment and expressed willingness to deposit a substantial amount to defreeze the bank account for discharging their liabilities. The petitioners argued that they have been cooperating in the investigation and have a long-standing business history, denying any wrongdoing in their transactions with vendors. Issue 3: Cooperation in Investigation and Readiness to Deposit Funds The petitioners emphasized their cooperation in the investigation, submitting all required documents and depositing a significant sum of money to show their commitment. They highlighted that no show cause notice had been issued, and no final assessment had taken place. The petitioners expressed readiness to join the investigation as directed, showcasing their proactive approach towards resolving the matter. Issue 4: Interpretation of Legal Provisions on Excess ITC The counsel for the petitioners referred to legal precedents, such as M/s. Jayachandran Alloys (P) Ltd. vs. The Superintendent of GST and Central Excise, to argue about the interpretation of Section 132 of the Act regarding offenses related to excess Input Tax Credit (ITC). The counsel highlighted the need for establishing the offense before imposing punishment and discussed the provisions for recovery of excess credit distributed to recipients. Issue 5: Comparison with Similar Judgments The judgment cited decisions from other High Courts, such as the Gujarat High Court and the Punjab and Haryana High Court, to support the legal arguments presented by the petitioners. These references aimed to draw parallels in the interpretation and application of relevant legal provisions across different jurisdictions, strengthening the petitioners' case. In conclusion, the High Court granted exemption subject to exceptions, disposed of the application, and directed the respondent to file a reply within four weeks. The court ordered no coercive steps against the petitioners until the next hearing date, emphasizing their obligation to cooperate in the investigation. The judgment clarified that it would apply only to the petitioners and not set a precedent for future cases.
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