2023 (1) TMI 236 - HC - GST

Lifting of provisional attachment of Bank Accounts of petitioner - section 83 of GST Act - HELD THAT - Noticing the factum of attachment of the bank accounts during the search proceeding, without any subjective satisfaction and the issue of passing of provisional order under section 83 before even such proceedings were completed, without there being any pendency of the proceedings, this court in the final hearing can adjudicate all these issues, but the court needs to indulge at this stage. On filing an Undertaking before this Court of maintaining the balance of Rs.5,88,153/- in savings account No.919010045294509 and balance of Rs.88,843/- in current account No.918020097072117 of Axis Bank, Bapunagar, the petitioner is permitted to operate his current account No.918020097072117 of Axis Bank, Bapunagar, upon the attachment being lifted on his current account - Let the scrutiny be completed by 11/01/2023. The matter shall be heard on that day finally.

Summary

Issues:
1. Attachment of bank accounts under Section 83 of GST Act without proper procedure.
2. Petitioner seeking direction to lift the attachment on bank accounts.
3. Dispute over the legality of the attachment and representation filed by the petitioner.
4. Respondent's argument based on the judgment in UtkarshIspat LLP case.
5. Subjective satisfaction post attachment of bank accounts.
6. Total liability amount and details of attached immovable property.
7. Court's decision on lifting the attachment and permitting operation of certain accounts.
8. Timeline set for completion of scrutiny and final hearing.

Analysis:

1. The petitioner filed a petition under Article 226 seeking the direction to lift the attachment on three bank accounts under Section 83 of the GST Act. The petitioner argued that the attachment was done without a separate order for one of the bank accounts and that his representation was not considered, contending that there were no pending proceedings under any Acts. The petitioner requested the quashing of the impugned attachment order and further relief regarding the attached stock.

2. The respondent, in their affidavit-in-reply, cited a previous court judgment and argued that the petitioner did not offer any property in lieu of the attachment of bank accounts. The respondent maintained that their actions were in accordance with the law, highlighting the order of seizure and subsequent attachment of the property and bank accounts. The respondent emphasized the necessity to examine stock registers and invoices for the financial year 2018-19.

3. During the hearing, the court considered the arguments presented by both parties. The respondent mentioned that the petitioner had submitted papers for the financial year 2018-19, and the scrutiny process was ongoing. The respondent clarified that the total liability, including penalty and interest, was significant. The court noted the subjective satisfaction recorded post attachment of bank accounts and the details of the attached immovable property.

4. The court observed that the attachment of bank accounts occurred during the search proceedings without proper subjective satisfaction and provisional orders under Section 83. The court reserved the right to adjudicate on these issues during the final hearing but refrained from intervening at that stage.

5. The court, after considering the circumstances, allowed the petitioner to operate one of the bank accounts upon filing an undertaking to maintain specific balances. A deadline was set for the completion of scrutiny by a certain date, with the matter scheduled for a final hearing on that day.

This detailed analysis covers the various legal issues, arguments presented by both parties, and the court's decision and directions in the judgment.