2022 (8) TMI 1142 - HC - GST

Jurisdiction of GST officer for attaching and withdrawing amount from bank account of the assessee - Seeking defreezing of account maintained by petitioner - HELD THAT - It is not reasonable to understand, prima facie, as to how the authorities get this power to take away amount from anybody s account without account holder s permission or even after taking away the money, they would not even consider it necessary to inform the account-holder that money from their account has been debited. This is nothing but high handedness and gross abuse of power. The concerned officer who instructed the bank to debit the amount of petitioner shall file his personal affidavit explaining therein under what authority of law that he got removed the money from petitioner s bank account or directed the bank to debit the bank account and why did he do it without even informing petitioner even after giving instructions to the bank. The officer is put to notice that this Court may even consider taking action against the officer if it is not satisfied with the explanation. The affidavit shall be filed and copies served on or before 25.07.2022. Rejoinder, if any, to be filed and copies served by 3.00 p.m. on 29.07.2022 - Stand over to 1st August, 2022.

Summary

Issues:
1. Unfreezing of petitioner's account with Axis Bank
2. Debit of Rs. 62,32,400 from petitioner's account by respondents without authorization
3. Lack of communication from respondents to petitioner regarding the debit
4. Legality and authority of respondents to take money from the account without permission
5. Direction to deposit the amount with the court by respondent No. 2
6. Instructions to officers regarding the use of force or coercion against taxpayers
7. Requirement for the concerned officer to file a personal affidavit explaining the authority behind the debit and lack of communication

Analysis:

1. The court had previously directed respondents to unfreeze the petitioner's account with Axis Bank, which was not promptly complied with by the bank until the petitioner threatened contempt action. This failure to comply with the court's order raised concerns about the bank's actions.

2. The petitioner alleged that respondents took Rs. 62,32,400 from its Axis Bank account without authorization, and the amount was transferred to respondents by way of RTGS. The petitioner denied giving any instructions to debit the amount, questioning the legality of such actions.

3. Despite the debit, respondents did not communicate with the petitioner regarding the transaction. This lack of communication raised doubts about the transparency and fairness of the actions taken by the respondents.

4. The court expressed strong disapproval of the authorities' actions, questioning the legality and authority behind taking money from an account without the account holder's permission. The court deemed this behavior as high-handedness and an abuse of power.

5. Respondent No. 2 was directed to deposit the entire amount with the court by a specified date, with a warning of contempt proceedings if the directive was not followed. This step aimed to ensure accountability and compliance with the court's orders.

6. The petitioner provided an instruction received regarding the prohibition of using force or coercion against taxpayers, emphasizing the need for strict disciplinary action against officers in case of wrongdoing. This highlighted the importance of fair and lawful conduct by tax authorities.

7. A requirement was imposed on the concerned officer to file a personal affidavit explaining the legal basis for the debit from the petitioner's account and the lack of communication. The court emphasized the need for transparency and accountability in dealings with taxpayers to prevent harassment and misuse of power.

Overall, the judgment addressed various issues related to the unauthorized debit from the petitioner's account, lack of communication, and the need for accountability and transparency in dealings with taxpayers. The court's directives aimed to uphold the rule of law and prevent abuse of power by authorities.