2022 (1) TMI 853 - HC - GST

Seeking release of provisionally attachment of Bank Accounts - seeking to unblock the Petitioner s Electronic Credit Ledger - Rule 86A(3) of the CGST Rules, 2017 - HELD THAT - In rejoinder, learned counsel for the petitioner states that the petitioner has been cooperating with the Investigating Agencies and the relevant documents have been furnished. She assures and undertakes to this Court that the petitioner will continue to appear as and when directed by the Investigating Authorities and will supply the documents which may be asked for. . The present writ petition along with pending application is disposed of with the directions to the respondents to de-freeze the petitioner s bank account as well as unblock the Electronic Credit Ledger within three working days

Summary

Issues:
Challenging the provisional attachment of bank account and blocking of Electronic Credit Ledger under CGST Rules, 2017.

Analysis:
The petitioner filed a writ petition challenging the order dated March 16, 2020, provisionally attaching their bank account and the order dated February 6, 2020, blocking their Electronic Credit Ledger. The petitioner sought directions to de-freeze the account and unblock the ledger. The petitioner's counsel argued that as per Rule 86A(3) of the CGST Rules, 2017, the Electronic Credit Ledger blocking order should have ceased after one year, but it remained blocked. Similarly, under Section 83(2) of the CGST Act, 2017, the provisional attachment order should have lapsed after one year, yet the bank account remained attached. The counsel relied on previous High Court judgments and the Supreme Court's decision in Radha Krishan Industries Vs. State of H.P. to support their arguments.

The court issued notice to the respondents, and the counsel for respondent No.1 and No.2 and 3 accepted the notice. Respondent No.2 and 3's counsel admitted that attachments and blocking of the ledger should cease after a year but mentioned the petitioner's non-appearance before the Investigating Officer and incomplete document submission. The petitioner's counsel reassured the court of cooperation with the Investigating Agencies and pledged to provide all necessary documents. The court accepted this undertaking and disposed of the petition, directing the respondents to de-freeze the bank account and unblock the Electronic Credit Ledger within three working days.

The court clarified that respondents could proceed as per the law, indicating that the petitioner's compliance with the Investigating Authorities was crucial for the resolution of the matter. The judgment emphasized the importance of following legal procedures and cooperating with investigative processes while upholding the petitioner's rights regarding the attachment and blocking issues under the CGST Rules.