2023 (9) TMI 785 - HC - GST

Seeking direction to de-freeze/allow the operation of bank account - order of provisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017 not received by petitioner - violation of principles of natural justice - HELD THAT - Admittedly, in terms of Section 83(2) of the CGST Act, an order passed under Section 83 of the CGST Act would cease to be operative after an expiry of a period of one year from the date of the order. Thus, even assuming that any order under Section 83 of the CGST Act was passed by the respondents, which had triggered the communication dated 07.03.2022; the said order would not be operative. It is not necessary for this Court to examine the various other contentions raised in the present petition. The Bank is directed not to further interdict the operation of the petitioner s bank account on the basis of the communication dated 07.03.2023, which has ceased to be operative - Petition allowed.

Summary

Issues Involved:
The issues involved in the judgment are related to freezing of a bank account under Section 83 of the Central Goods and Services Tax Act, 2017 without a valid order of provisional attachment, and the subsequent communication directing the bank to freeze the account.

Freezing of Bank Account without Valid Order:
The petitioner filed a petition seeking a writ of mandamus to direct the respondent to de-freeze the bank account as no order of provisional attachment under Section 83 of the CGST Act was received. The communication issued by the respondent to freeze the account was sent directly to the bank without any further communication. The Court noted that as per Section 83(2) of the CGST Act, an order under Section 83 ceases to be operative after one year from the date of the order. Therefore, even if an order was passed triggering the communication to freeze the account, it would not be valid at the time of the judgment. The Court directed the bank not to interfere with the operation of the petitioner's bank account based on the communication that had become inoperative.

Outcome:
The High Court allowed the petition, directing the respondent to de-freeze the bank account and setting aside the communication dated 07.03.2022 that directed the freezing of the account. The Court held that since the order under Section 83 of the CGST Act had ceased to be operative, there was no valid basis for the continued freezing of the account. The petitioner's grievance was addressed by the Court by ensuring that the bank could resume normal operations on the account.