9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 1155 - HC - GSTAttachment of Bank Accounts - Search and inspection under Section 67 of the CGST Act - HELD THAT - In the case in hand, search was conducted on 09.06.2020 and the further proceedings thereof are still pending. Claiming to be necessary in the interest of revenue, by orders at For information purpose only Exts.P6, P6A and P6B, bank accounts of the petitioner came to be attached and subsequently, on the basis of objection (Ext.P7), the provisional attachment order has been modified by the order at Ext.P9. The petitioner is directed to furnish the security in the form of bank guarantee in the name of the Hon'ble President of India, equivalent to the credit balance available as on 20.08.2020 which according to the learned counsel for the petitioner, is about ₹ 30 crores. Neither the order at Exts.P6(series) nor the order at Ext.P9 reflects anything which substantiate that interest of revenue requires this action to be taken in the matter. What is the reasonable apprehension with the authority is not disclosed in the order at Ext.P6(Series) or in the order at Ext.P9 - Furnishing bank guarantee of about ₹ 30 crores would certainly block that much amount from the business of the petitioner. The petitioner, on account of an order by the adjudicating authority has no remedy of appeal under Section 107 of the CGST Act in the matter. The order directing furnishing of the bank guarantee needs to be stayed till disposal of the writ petition, by directing the petitioner to execute the undertaking that he will not sell, alienate or dealt with any of his assets as seen from the balance sheet produced by him at Ext.P16 - Petition disposed off.
Issues:
Challenge to orders of attachment of bank accounts under Section 83 of the CGST Act; Validity of directing petitioner to furnish bank guarantee; Interpretation of powers under Section 83 of the CGST Act. Analysis: 1. The petitioner challenged the orders of attachment of its bank accounts under Section 83 of the CGST Act. The petitioner sought interim relief by requesting the release of the bank guarantee and the discharge of the bond executed pursuant to the orders. The search and inspection under Section 67 of the CGST Act led to the provisional attachment of the bank accounts, against which the petitioner raised objections. A writ petition was filed challenging the attachment, resulting in a modification of the provisional attachment conditions by an order dated 24.08.2020. 2. The petitioner argued that directing the petitioner to furnish a bank guarantee under Section 83 of the CGST Act was impermissible and illegal. The petitioner contended that the statutory appeal process under Section 107 allows for a pre-deposit of only 10% of the disputed amount, with a maximum limit of ?25 crores. The petitioner claimed that directing a bank guarantee of around ?30 crores would adversely affect the business and was contrary to the provisions for adjudicating demands post a search under Section 67 of the CGST Act. 3. The respondent, however, defended the orders by stating that they were provisional in nature and subject to finalization after hearing objections. The respondent argued that the modification of the provisional attachment was legal and that the petitioner could appeal if aggrieved. The respondent highlighted that the withdrawal of the earlier writ petition impacted the petitioner's stance on the modified orders. 4. The Court considered the arguments and referred to judgments from the Gujarat High Court and the Bombay High Court regarding the powers under Section 83 of the CGST Act. The Court emphasized that the power of provisional attachment should be used sparingly and based on substantive grounds. The Court found that the orders did not sufficiently demonstrate the necessity of the bank guarantee and stayed the direction to furnish the bank guarantee until the disposal of the writ petition. The petitioner was directed to provide an undertaking not to alienate any fixed assets until the petition's resolution. 5. In conclusion, the Court stayed the direction to furnish the bank guarantee, emphasizing the need for a fair and reasonable exercise of powers under Section 83 of the CGST Act. The Court's decision was based on the principles outlined in the referenced judgments and aimed to protect the petitioner's business interests pending the final resolution of the matter.
|
