2021 (4) TMI 504 - HC - GST

Attachment of petitioner's bank accounts - petitioner's case is that he has to make repayment of salaries of employees and hence attached bank accounts ought to be released - HELD THAT - The counsel for the banks notes the aforesaid position and having regard to the statements made by the counsel appearing for the Petitioner and the Revenue states that if that be so, the petitioner may be able to operate the bank account, for the amounts over and above the amount of revenue of ₹ 78.91 crores - At this stage, learned senior counsel for the petitioner submits that fixed deposit of the amount of ₹ 78.91 crores may be considered. It may be in the interest of all to have the same in a nationalized bank. The petitioner is at liberty to approach the respondent No. 2 for the same. Petition disposed off.

Summary

Issues:
Provisional attachment of bank accounts under section 83 of the Central Goods and Services Tax Act, 2017 (CGST) - Petitioner's challenge to the attachment orders - Revenue's claim of tax liability on import of services - Petitioner's proposal to secure revenue's concern by depositing additional amount in attached/frozen bank accounts - Permission for petitioner to operate bank accounts over and above the revenue amount - Consideration of fixed deposit of the revenue amount.

Analysis:
The petitioner approached the court aggrieved by two communications issued by the Principal Director General of Goods and Service Tax Intelligence, Mumbai, provisionally attaching the petitioner's bank accounts maintained with certain respondents. Senior counsel for the petitioner argued that the orders were drastic, affecting the petitioner's ability to meet expenses, including staff salaries, and contended that the orders lacked foundation, leading to severe consequences for the petitioner. On the other hand, senior counsel for the respondents defended the attachment orders, stating they were authorized under section 83 of the CGST Act and that the petitioner had the remedy to object to the orders under Rule 159(5). The respondents alleged that the petitioner received taxable services from a foreign entity without consideration, making the petitioner liable to pay tax on the import of services, with a significant revenue amount at stake.

During the proceedings, the petitioner proposed to secure the revenue's concern by depositing an additional amount in the attached/frozen bank accounts, suggesting that the bank accounts remain attached/frozen to the extent of the revenue amount while allowing the petitioner to operate the accounts for other expenses. The revenue, through its senior advocate, expressed no particular objection to this arrangement as long as their interest was secured. Subsequently, the counsel for the banks acknowledged this position and agreed that the petitioner could operate the bank account for amounts exceeding the revenue amount.

Ultimately, the court accepted the statements made by the parties, leading to the disposal of the petition. However, at a later stage, the senior counsel for the petitioner requested the consideration of placing the revenue amount in a fixed deposit, preferably in a nationalized bank, for the benefit of all parties involved. The petitioner was granted liberty to approach the relevant authority for this purpose, concluding the matter before the court.