2023 (2) TMI 225 - HC - GST

Application for de-freezing the account of the company, rejected - rejection of revision application solely on the ground that the petitioner-company could have applied for de-freezing of the account in an appeal filed by the company before the GST Appellate Authority - merits of the case not gone through - non-application of mind - violation of principles of natural justice - HELD THAT - Perusal of the order would show that the revision was rejected on the ground that the petitioner ought to have moved the application before the Appellate Authority for de-freezing the account. It is further observed in the order that the petitioner ought to have moved separate application before the GST Appellate Authority and not before the trial Court. In my view, this observation is out of the context. The application filed by the petitioner-company for de-freezing the account was not opposed at any time by the prosecution on this ground. Similarly, the application was not rejected by the Magistrate on this ground. Learned Magistrate found the application otherwise maintainable. The order passed by the learned Additional Sessions Judge, Kahamgaon suffers from non application of the provisions of law and ultimately the non-application of mind to the issue involved in the matter. Therefore, this order is required to be set aside. Petition allowed.

Summary

Issues:
1. Correctness of the order rejecting the revision application for de-freezing a bank account.
2. Legal grounds for rejecting the revision application.
3. Application of provisions of law in deciding the revision application.

Analysis:
1. The petitioner, a company, challenged the order dated 04.06.2022, rejecting their application for de-freezing their bank account with UCO Bank. The order was passed by the Additional Sessions Judge, confirming the decision of the Judicial Magistrate First Class, Khamgaon, based on a complaint by the Assistant Sales Tax Officer for non-submission of GST returns. The investigating officer had frozen the bank account, leading to the application for de-freezing.

2. The Magistrate rejected the application citing the preliminary stage of the investigation and the seriousness of the alleged offences. On revision, the Additional Sessions Judge rejected the application, suggesting the petitioner should have applied before the GST Appellate Authority. The petitioner argued that the rejection was solely based on this ground, which was not raised earlier and was irrelevant to the application's merit. The High Court found the rejection flawed due to a lack of legal application and proper consideration of the facts.

3. The High Court held that the Additional Sessions Judge's order lacked proper legal reasoning and failed to address the issue at hand. The Court set aside the order and remitted the matter back to the Additional Sessions Judge for a fresh decision in accordance with the law. The Judge was directed to dispose of the matter within one month from receiving the order, emphasizing the need for a thorough and lawful consideration of the petitioner's application for de-freezing the bank account.