Shocking abuse of power by GST authorities

[Kamal Aggarwal]

In a recent decision in the case of M/S. VIKAS ENTERPRISES VERSUS COMMISSIONER OF CENTRAL TAX (GST) , DELHI NORTH & ANR. [2023 (8) TMI 239 - DELHI HIGH COURT], the hon’ble Delhi High Court has, directed to remove debit freeze on a bank account of a taxpayer wherein the order was passed by a Superintendent. As per the GST law, an order for freezing a bank account can be passed by a Commissioner only. The Commissioner also could have passed such an order only if he is satisfied that it is necessary to pass such an order for protecting the interest of revenue. In the present case, the order was passed by the Superintendent only. Even the required form DRC-22 was also not issued. 

Attaching a bank account or other assets of a taxpayer is a draconian step and would have a serious adverse effect on the business of the taxpayer. Recently, the hon’ble Supreme Court has, in Radha Krishan Industries Vs. State of Himachal Pradesh, observed that such drastic powers must be exercise only where it is necessary. Yet, this has made little difference to the concerned officer while passing such an order and that too, without having the requisite authority under the law. 

The taxpayer assuming that the order for attachment was passed following the due process of law, approached the Commissioner for relief. However, the Commissioner did not respond to his application as no such order was issued by him. Yet, the Commissioner did not make any attempt to inquire as to why a taxpayer was forced to make such an application in the first place. It clearly reflects from the plain facts that someone in his office has misused his position and issued an order without an authority under the law. Was he not supposed to inquire about and take the remedial action?

Finally, the hon’ble Delhi High Court has ordered for defreezing of the bank account vide order dated 31st July 2023 whereas the bank account was attached on 25th March 2022 ie after more than a year. Interestingly, the Section 83 provides that a bank account can be freezed only for one year. Perhaps the time limit applies to legally issued orders only.  

Finally, what happens to the officer concerned? Or to his supervising commissioner. The officer gets away by cost of Rs. 5,000/- and not even a word for the commissioner. So, cost of Rs. 5,000/- for illegally freezing bank account of a taxpayer for more than a year. Would we say justice served? Or the order deterrent enough for other officers?

Discussions to this article

[Sadanand Bulbule]

Dear Sir

Such incidents of high handedness has become routine.The erring officers should be seriously reprimanded not to repeat in their lifetime. The marginalised tax payers are the real victims as their voice is never heard by the people sitting in ivory towers.

[Shyam Naik]

There are shocking cases of invasion of privacy, undermining the dignity, sentiments, abusive languages etc during search / survey operations.

At times I personally feels that Revenue Mop Up by hook or crook outweigh fundamental rights of citizens in the eye of authorities from top to bottom, barring a very few.

It is doubtful, whether the officers are at all trained in Natural Justice ?

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

Agree with your observations. Then what is the solution ?

Mahatma Gandhi said, " To tolerate injustice is also an offence".

"Nobody can hurt me without my permission"-------Mahatma Gandhi

[Sadanand Bulbule]

Dear Sir ji

I have experienced that, the honest tax payers are reeling in the whirlpool of illegal tax demands for multiples reasons and the real culprits are relaxing behind the silk curtains. The following causes are triggering “tax vulturism".

1. Lack of effective true knowledge of facts and the law. Lack of pure discriminative powers. Unwillingness to obey the rules the way they are framed. No adherence to the binding judicial rulings.

2. Lack of guts to expose the truth due to fear of transfers to waterless spots, worry of settlement of pension etc.

3. Increasing tendency of political freebies to appease the vote banks, more money is required to fulfill them. The political and administrative bosses are fastening the unscrupulous, unscientific and unreachable targets to the officers.

4. There are some honest tax officers. They are scapegoated and are under constant threat of mental, emotional and psychological pressure to reach the unreachable targets. Some are suffering from restlessness. The victims are again the honest tax payers.

5. Nepotism, favouritism and spoonism are adding fuel to the fire and have become hyper sharp tools in the maladministration.

6. "Temporary" collection of tax is never the permanent revenue due to the Government. The real and genuine revenue is never refundable.

7.The tax administration is losing its fairness at rocket speed, never ever seen in the history.

8. There are other indescribable forces that play upon the administration.

Solution-opinion:

The GST regime is ruled by digital administration. Everything is available to everyone at everyplace. So, as the GSTN Portal is monitoring every single transaction of tax payers, so also the GOI and CBIC should monitor every decision/order of the officers to ensure its credibility, legality and fairness. It is its duty also. This might increase the much needed vigilance over the erring officers & help reduce the unlawful demands. Mere filing of appeals or writ petitions against the unlawful orders is not a complacent remedy and the GST Act. How to avoid the needless litigation is the real remedy. The GOI/CBIC cannot afford to remain mutely absorbing unlawful orders and they should come out heavily on the offending officers to restore justice at all levels. Every time this cannot be expected from the judicial courts. The judicial courts are not in place only to settle the tax matters. They have more serious issues to deal with and render justice.

I am also aware that, this is not as simple as I opine. The tax termites are deep rooted. But anyway it is not impossible to cause the purified orders, if the GOI minds. Always higher intelligence and conscious thoughts should flow downwards. Without this no quality administration is possible. To be a genuine taxman, a God given duty, pure intellect and divine calmness is vital for any expression of right discernment. Calmness brings clarity of intuition itself.

The dawn of the GST regime with slogan of "ease of doing business" has literally become slow-gun to the honest tax payers.

JUSTICE IS NEVER AN OPTION. BUT IT IS THE MOST NECESSITY FOR HUMAN CIVILIZATION. OTHERWISE ONE WOULD LOSE THE TAG OF BEING CIVILIZED.

Are these opinions not mirages? Certainly they are.