2022 (3) TMI 496 - HC - GST

Provisional attachment of bank accounts as well as immovable properties - petitioners states that without prejudice to the rights and contentions of the petitioners, they have no objection to their accounts being debit freezed for ₹ 25,000/- each, subject to final determination of the show cause notices - HELD THAT - This Court directs the bankers of the Petitioners to debit freeze the account of the Petitioners for ₹ 25,000/- each. The immovable properties of the Petitioners are directed to be released/de-freezed not later than three days from today. The Petitioners bankers are also directed to allow the Petitioners to utilize the amount lying in their bank accounts over and above the amount of ₹ 25,000/-. The present writ petition along with pending applications stands disposed of.

Summary

Issues:
Challenge to provisional attachment of bank accounts and immovable properties under Section 83 of the CGST Act, 2017; Release/de-freeze of personal bank accounts and immovable properties; Imposition of penalty under Section 74 of the CGST Act; Debit freezing of bank accounts under Section 122(3) of the CGST Act; Withdrawal/utilization of amounts over and above the frozen sum; Compliance with show cause notices.

Analysis:

The judgment by the Delhi High Court, delivered by Hon'ble Mr. Justice Manmohan, addressed a writ petition challenging the letter dated 07th December, 2020, issued under Section 83 of the CGST Act, 2017, directing the provisional attachment of bank accounts and immovable properties of three Petitioners. The Petitioners sought directions for the release/de-freeze of their assets provisionally attached. On the last hearing date, the Respondent's counsel sought time for instructions. In the recent hearing, it was revealed that a show cause notice dated 15th July, 2021, under Section 74 of the CGST Act, proposing a penalty, had been issued to all Petitioners. Additionally, fresh DRC-22 notices were issued, debiting &8377; 25,000/- each from the Petitioners' bank accounts to secure the penalty under Section 122(3) of the CGST Act.

The Respondent's counsel informed the court about the issuance of show cause notices and the freezing of accounts, while the Petitioners' counsel expressed no objection to the debit freezing of &8377; 25,000/- each, subject to the final determination of the show cause notices. The Petitioners requested permission to withdraw/utilize amounts exceeding &8377; 25,000/- in their bank accounts. Consequently, the court directed the Petitioners' bankers to freeze the accounts for &8377; 25,000/- each and ordered the release/de-freeze of the immovable properties within three days. Moreover, the Petitioners were allowed to utilize the excess amounts in their bank accounts. The judgment disposed of the writ petition and related applications in light of the provided directions, ensuring compliance with the legal provisions and safeguarding the rights of the parties involved.