2021 (2) TMI 1120 - HC - GST

Refund sought of on amount deposited - petitioner was compelled to deposit amount with the respondents and though the said amount was deposited as far back as on 1st July, 2020 and 31st August, 2020 but the respondents are merely retaining the said amount and have not taken any further action - Provisional attachment of Bank Account of petitioner - Section 83 of the Central Goods and Services Tax (CGST) Act, 2017 - HELD THAT - It appears that the respondents were required to issue notices under Sections 73 and/or 74 of the Act to the petitioner and which the respondents have not done till now. It prima facie appears that the respondents, taking advantage of the petitioner having been so compelled to make the deposit, albeit without prejudice to its rights and contentions, are not in a hurry. Thus, unless the respondents issue notice, within a time bound period, a direction needs to be issued for refund of the amounts so deposited by the petitioner; if the notices are issued, further remedy thereagainst would be available to the petitioner - counsel for the respondents seeks time to obtain instructions. List on 5th March, 2021.

Summary

Issues:
Challenge to letters/orders summoning petitioner for evidence and provisional attachment under CGST Act, 2017; Petitioner's request for refund of deposited amount due to lack of further action by respondents.

Analysis:
The judgment pertains to a writ petition challenging letters/orders dated 26th June, 2020 and 27th June, 2020, under Section 83 of the Central Goods and Services Tax (CGST) Act, 2017, summoning the petitioner for evidence and provisionally attaching the monies in the petitioner's bank account. The petitioner, to prevent business disruption due to the account attachment, deposited over ?19 crores with the respondents on 1st July, 2020, and 31st August, 2020. However, the respondents did not take any further action, leading the petitioner to seek a refund of the deposited amount.

The court noted that the respondents had not issued notices under Sections 73 and/or 74 of the Act to the petitioner as required. It observed that the respondents seemed to be delaying further action despite the petitioner's deposit. The court expressed a prima facie view that unless the respondents issue notices within a time-bound period, a direction should be given for the refund of the deposited amounts. The court highlighted that if notices are issued, the petitioner would have additional remedies available.

During the proceedings, the counsel for the respondents requested time to obtain instructions. Consequently, the court scheduled the matter for the next hearing on 5th March, 2021. The judgment underscores the importance of procedural fairness and adherence to statutory requirements in matters involving tax disputes and provisional attachments under the CGST Act, 2017. It emphasizes the need for timely issuance of notices and the provision of adequate remedies to affected parties to ensure a fair and just resolution.