2022 (3) TMI 577 - HC - GST

Provisional attachment of bank accounts of petitioner - Section 83 of GST Act - HELD THAT - it is in the best interest of both parties to permit the petitioner to continue in business operations subject to the caveats laid by me above and any further that the revenue may choose to impose. The petitioner must be permitted to approch the revenue by way of a representation seeking lifting of the bank attachment, conditional upon her furnishing an undertaking therein to made earnest efforts to repay the admitted dues in line with a scheme of installment to be arrived at. The revenue will consider the representation, take into account the amounts remitted by the petitioner, till date, arrive at a new scheme of installment and thereafter, consider lifting the bank attachment. In the case of NOKIA INDIA PVT LTD VERSUS ADDITIONAL COMMISSIONER OF INCOME TAX O 2014 (3) TMI 1195 - SUPREME COURT , an order under Section 281(B) of the Income Tax Act, provisionally attaching the bank accounts of that assessee under the Income Tax Act for arrears of income tax, was considered by the Hon'ble Supreme Court and noticing the position that the petitioner was managing a running concern, the bank account was ordered to be lifted, upon condition that a monthly statement of account is filed in hard copy, to ensure proper monitoring of the receipts and payments from that account. If a representation is filed by this petitioner, let it be disposed within a period of three (3) weeks from date of receipt thereof, after hearing the petitioner - Petition disposed off.

Summary

Issues:
1. Allegations of non-remittance of Service Tax and Goods and Service Tax (ST & GST).
2. Provisional attachment of the petitioner's bank account under Section 83 of the Act.
3. Challenge to the provisional attachment hindering business operations.
4. Request for lifting the bank attachment conditional upon repayment scheme.

Analysis:
1. The petitioner, a first-generation woman entrepreneur in the recruitment business, faced allegations of not remitting the collected Service Tax and GST to the Department, leading to a substantial shortfall in payments. The petitioner admitted to the shortfall and proposed a repayment scheme in installments.

2. The main contention of the writ petition was the challenge against the provisional attachment of the petitioner's bank account by the revenue department under Section 83 of the Act. The petitioner argued that the attachment hindered business operations and repayment efforts, despite acknowledging the arrears.

3. The court acknowledged the difficulties faced by businesses due to the pandemic and emphasized the importance of allowing the petitioner to continue legitimate business activities. The judge directed the revenue to consider lifting the bank attachment upon the petitioner's representation, subject to fulfilling conditions and making earnest efforts to repay the dues.

4. Referring to relevant judgments, including the Supreme Court's stance on proportionality and monitoring of accounts, the court highlighted the need for a balanced approach. Drawing parallels with past cases, the court emphasized proper monitoring of transactions while allowing the petitioner to operate the bank account, subject to regular reporting and compliance with repayment terms.

In conclusion, the court disposed of the writ petition, instructing the revenue to review the representation for lifting the bank attachment within three weeks. The judgment aimed to strike a balance between the interests of the petitioner and the revenue department, ensuring a fair opportunity for repayment while permitting business continuity.