2024 (12) TMI 1123 - HC - GST

Attachment and Appropriation of funds of amount from the petitioner s Axis Bank, Bhayander Branch - non-compliance with the principles of natural justice and fair play - HELD THAT - This is not a case where the petitioner should be allowed to deal with any of the amounts in the petitioner s Axis Bank Account No. 918020073067221 at Bhayander Branch. At the same time, since the petitioner has a right to question the Order-in-Original dated 25 May 2023, it will not be proper if the petitioner is deprived of this valuable right on account of his not being able to arrange the pre-deposit amount of Rs.8,76,564/-. Without depositing this amount, the petitioner s appeal against the order dated 25 May 2023 would not be entertained. The Axis Bank, Bhayander Branch is directed to transfer the entire amount in the petitioner s bank account to the Registrar of this Court within two weeks of the parties producing an authenticated copy of this order - Once the Bank deposits this amount in the Court, the Registrar of this Court must transfer an amount of Rs. 8,76,564/- to the 2nd respondent within two weeks of such deposit being made. Appeal disposed off.

Summary

Issues:
1. Appropriation of funds by respondents without compliance with principles of natural justice.
2. Legality of marking lien on petitioner's bank account.
3. Petitioner's right to appeal against Order-in-Original dated 25 May 2023.
4. Balancing interests of both parties regarding the pre-deposit amount for appeal.
5. Directions for transferring funds to the Court and subsequent transfer to the respondent.
6. Investment of balance amount in fixed deposit pending appeal.

Analysis:

The High Court of Bombay heard the matter concerning the appropriation of funds by the respondents from the petitioner's bank account without adhering to the principles of natural justice. The Court noted that the respondents had attached a specific amount towards tax dues, leading to a subsequent Order-in-Original dated 25 May 2023, which marked a lien on the petitioner's account against the demanded dues. The petitioner challenged this action through a petition filed within the prescribed limitation period for appealing against the Order-in-Original.

The petitioner contended that the marking of the lien prevented them from depositing the required pre-deposit amount for instituting an appeal. On the other hand, the respondents argued that the petition was frivolous, emphasizing the petitioner's alleged involvement in issuing fake invoices for bogus ITC credit under GST laws. The Court, after considering both sides, aimed to provide a balanced order that safeguarded the interests of both parties without unjust prejudice.

In its judgment, the Court acknowledged the need to protect the revenue interests of the respondents while ensuring that the petitioner's right to appeal the Order-in-Original was not unjustly impeded. Consequently, the Court directed the Axis Bank to transfer the entire amount in the petitioner's account to the Court, which would then transfer a specific sum to the respondent as a pre-deposit for the appeal. This transfer was to occur within a specified timeline, enabling the petitioner to file the appeal against the Order-in-Original.

Furthermore, the Court instructed the Registrar to invest the remaining balance in a fixed deposit with a nationalized bank, subject to the outcome of the appeal process. If the appeal was initiated within the stipulated period, the appellate authority was directed to decide the case on its merits without considering the limitation issue. The judgment concluded by disposing of the rule without imposing any cost orders, emphasizing compliance with the directives outlined in the authenticated copy of the order for all involved parties.