2022 (4) TMI 193 - HC - GST

Provisional attachment of Bank Accounts - ex-parte order - opportunity of personal hearing not provided - HELD THAT - It appears from the materials on record that a show-cause notice came to be issued to the writ applicant in Form GST DRC-01 dated 24th August, 2020 calling upon the writ applicant to show-cause as to why an amount of ₹ 16,21,853/- shall not be levied with interest and penalty for the alleged contraventions as mentioned in the show-cause notice - Upon receipt of such show-cause notice, a formal reply was filed wherein the writ applicant requested the authority concerned to furnish him few documents which were referred to and relied upon in the show-cause notice. It is not in dispute that such documents as demanded by the writ applicant never came to be issued at any point of time. It appears that, thereafter, the authority concerned proceeded to pass the final order in MOV-07. In the facts and circumstances of the case, the impugned order passed by the authority concerned in MOV-07 is hereby quashed and set aside. The matter is remitted to the concerned authority. The concerned authority shall furnish all the documents as demanded by the writ applicant at the earliest - Application allowed.

Summary

Issues involved:
- Provisional attachment of bank account
- Quashing of orders under GST Act
- Violation of principles of natural justice

Provisional Attachment of Bank Account:
The petitioner sought relief from the provisional attachment of their bank account, arguing that the attachment was unnecessary as the interest of the revenue was already protected by the attachment of two shops. The court directed the valuation of the attached properties and stated that if the valuation exceeded the tax liability, the attachment would be lifted, including that of the bank account. Subsequently, the court lifted the provisional attachment of the bank account, emphasizing that the tax liability had already been safeguarded by the attachment of the shop, and there was no need for the bank account to remain attached.

Quashing of Orders under GST Act:
The petitioner received a show-cause notice regarding alleged contraventions, but the requested documents were never provided. The final order was passed without giving the petitioner an opportunity of hearing. The court, upon hearing arguments from both sides, quashed and set aside the impugned order, remitting the matter to the concerned authority. The authority was directed to provide the demanded documents promptly, allow the petitioner to respond, provide an opportunity for a hearing, and then pass a final order on merits within two months from the date of the court's order. A similar decision was made in a connected Special Civil Application.

Violation of Principles of Natural Justice:
The court found that the final order passed by the authority without giving the petitioner an opportunity of hearing violated the principles of natural justice. Consequently, the impugned order was quashed and set aside, and the matter was remitted to the concerned authority for fresh consideration. The authority was instructed to provide the demanded documents, allow the petitioner to respond, conduct a hearing, and then pass a final order within two months. The connected Special Civil Application was also allowed on the same grounds.