2021 (2) TMI 927 - HC - GST

Attachment of Bank Accounts of petitioner - Section 83 of the CGST Act, 2017 - HELD THAT - This writ-application disposed off directing the writ-applicant that he shall maintain the minimum balance of ₹ 22 lac in the bank account in question up to 21st September 2021. On this condition, we permit the writ-applicant to operate his bank account. The respondents shall intimate the bank concerned about this order and permit the writ-applicant to operate his bank account. The writ-applicant shall file his undertaking in this regard on oath in writing before the concerned department as well as placed the same undertaking on the record of this case also. The inquiry, if any, initiated, shall proceed further in accordance with law.

Summary

Issues:
1. Application under Article 226 for relief against orders under Section 83 of the CGST Act, 2017.

Analysis:
1. The writ-application sought relief against orders dated 22.09.2020 issued by Respondent No.4 under Section 83 of the CGST Act, 2017, to provisionally attach the petitioner's bank account. The petitioner requested a writ of certiorari or mandamus to quash the orders and stay their operation pending disposal of the petition. The petitioner also sought costs and any other relief deemed fit by the Court.

2. The Court noted that the challenge was to the order of bank account attachment under Section 83 of the GST Act, 2017, issued during search proceedings under Section 67 of the Act. The tax liability of ?86,92,950, including penalty and interest, was claimed by the department. The State respondent indicated that the inquiry was ongoing, and the final decision on issuing show cause notices under Section 73 or 74 would be made post-inquiry.

3. The Court considered the arguments presented by both parties. The petitioner's counsel contended that the bank account attachment was hindering business operations, while the State's counsel highlighted the ongoing inquiry. The Court suggested that if the petitioner provided tangible security equivalent to the alleged liability, the bank account attachment might be lifted.

4. During further hearings, the petitioner offered to maintain a minimum balance of ?22 lakh in the attached bank account to safeguard the revenue's interest pending the inquiry. The State's counsel found this proposal reasonable and suggested the petitioner file an undertaking to maintain the specified balance in the account.

5. Consequently, the Court disposed of the writ-application by directing the petitioner to maintain a minimum balance of ?22 lakh in the bank account until 21st September 2021. The petitioner was permitted to operate the bank account under this condition, with instructions to file an undertaking before the Court and the concerned department. The inquiry was to proceed as per the law.

6. The Court's order effectively resolved the matter, allowing the petitioner to continue business operations while ensuring the revenue's interest was protected. The judgment balanced the rights of both parties by imposing conditions for the petitioner to maintain a specified balance in the bank account until a specified date.