2023 (3) TMI 678 - HC - GST

Power of respondent to attach the bank account of petitioner - petitioner is not the tax payer against whom any proceedings have been initiated - petitioner also contends that the respondent has no extra territorial jurisdiction to pass such draconian order in respect of persons who are not tax payers - HELD THAT - The petitioner is a registered dealer in Delhi. Its bank accounts in Delhi have been attached and, therefore, we do not consider it apposite that the petitioner be relegated to avail its remedies in another jurisdiction - Concededly, there is no material against the petitioner, at this stage, except that a sum of Rs.16,50,000/- were transferred from the bank account of M/s. Hello Enterprises to the petitioner. The action of attachment of bank accounts is a draconian measure and must be resorted to as a measure of last resort. As an interim measure, it is considered apposite to suspend the order of attachment of the petitioner s bank account in question and direct that the petitioner be permitted to operate the same subject to the petitioner depositing a sum of ₹16,50,000/- with the Registry of this Court within one week from date. List on 10.05.2023.

Summary

Issues involved:
Impugning attachment of petitioner's bank account by Commissioner, Goods and Services Tax, Gurugram without jurisdiction or valid grounds.

Analysis:
The petitioner challenged the attachment of their bank account by the Commissioner, Goods and Services Tax, Gurugram, contending that the respondent lacked the authority to attach the account as the petitioner was not the taxpayer under investigation. The petitioner, a registered dealer in Delhi, highlighted that investigations against other entities led to the freezing of their account, even though there was no incriminating material against them except for receiving a sum from one of the entities under scrutiny.

The respondent argued that the petitioner should seek remedies in another jurisdiction, citing a previous case where a similar petitioner withdrew their writ petition with liberty to approach the appropriate forum. However, the court noted that the previous withdrawal did not establish a precedent depriving it of jurisdiction to entertain the present petition, especially since the petitioner's accounts were in Delhi.

The court emphasized that attaching bank accounts is a drastic measure and should be a last resort, especially when there is no substantial evidence against the account holder. Recognizing the substantial questions raised regarding the respondent's jurisdiction to attach the account, the court decided to suspend the attachment order temporarily. They directed the petitioner to deposit the transferred sum with the court registry to operate the account, ensuring compliance with the attachment order.

Furthermore, the court instructed the respondent to provide reasons for the attachment and present relevant files for the court's review in the upcoming hearing. The respondent was given time to file a counter affidavit, and subsequent filings were scheduled within specified timelines. The case was listed for further proceedings on a set date in 2023.