2021 (2) TMI 697 - HC - GST

Seeking directions holding the proceedings initiated by Respondent No.1 of provisional attachment of bank account as bad and without authority of law - immediate sanction of refund of IGST paid - Zero Rated Supplies - seeking direction to conclude the proceedings within a specified time and submission of report to respondent - attachment of his bank account in exercise of powers under Section-83 of the Central Goods and Services Tax Act, 2017 - HELD THAT - We take notice of the fact that on 25/02/2021 the statutory time period for keeping the bank account attached would come to an end. In such circumstances, the bank account attached as on date would get defreezed by efflux of time. Withholding of the refund of IGST paid in regard to the goods exported i.e. 'Zero Rated Supplies' made vide shipping bills - HELD THAT - According to Mr. Raval, a preliminary inquiry as regard the dealings of the writ-applicant has revealed that he is one of the 'risky exporters'. Mr. Raval submits that the inquiry is still in progress. At the end of the inquiry, the concerned department shall take an appropriate call as regards the claim of the writ-applicant with respect to the refund. This writ-application is disposed off by observing that the inquiry may continue but the at the same time, it should not continue for an indefinite period of time. We expect the concerned department to complete the inquiry within a period of eight weeks from today and take an appropriate decision in accordance with law.

Summary

Issues Involved:
1. Provisional attachment of bank account under Section-83 of the Central Goods and Services Tax Act, 2017.
2. Withholding of the refund of IGST paid for goods exported, known as 'Zero Rated Supplies.'

Analysis:

Provisional Attachment of Bank Account:
The writ-applicant challenged the provisional attachment of their bank account under Section-83 of the CGST Act, 2017. The High Court noted that the statutory time period for the attachment was set to expire soon. Consequently, the bank account would be defreezed automatically. The court acknowledged this fact and did not find it necessary to intervene in the attachment matter, given the imminent defreezing of the account.

Withholding of IGST Refund:
The second issue pertained to the withholding of the refund of IGST paid for goods exported as 'Zero Rated Supplies.' The respondent authorities cited the writ-applicant as a 'risky exporter' based on a preliminary inquiry. They informed the court that the inquiry was ongoing, and a decision regarding the refund would be made after its completion. The High Court directed the concerned department to conclude the inquiry within eight weeks and make a decision based on the findings. The court emphasized that the inquiry should not be prolonged indefinitely. Additionally, if any inculpatory evidence emerged against the writ-applicant, they must be given an opportunity to be heard before a final decision on withholding the refund was reached.

In conclusion, the High Court disposed of the writ-application, allowing the inquiry to continue but setting a timeframe for its completion. The court emphasized the importance of a timely decision based on the inquiry's outcome and highlighted the necessity of providing the writ-applicant with a fair hearing if adverse findings were made.