2023 (6) TMI 833 - HC - GST

Attachment proceedings under Section 83 of CGST Act - out of the total amount of Rs. 56,14,388, Rs. 46 lakhs came to be withdrawn by the respondents from the bank account of petitioner maintained with HDFC Bank - Requirement of pre-deposit - HELD THAT - Having gone through the material placed on record, it would emerge that pursuant to the show cause notice issued under Section 73 of the Act, adjudication order dated 02.03.2022 came to be passed in FORM GST DRC 07, whereby, the petitioner was directed to make payment of Rs. 56,14,388/- within the stipulated time. It is not in dispute that the petitioner preferred an appeal under Section 107 of the Act after the period of limitation i.e. after a period of three months. Along with the said appeal, petitioner has also preferred separate application for condonation of delay. The said proceedings are still pending before the Appellate Authority. Now, it is the contention of the petitioner that, in the meantime, on completion of period of three months, the respondents have passed an order of provisional attachment under Section 83 of the Act and thereby amount of Rs. 46 lakh came to be withdrawn from the account of the petitioner maintained with HDFC Bank. It is the case of the petitioner that as per the provisions contained in section 107 of the Act, the petitioner is required to pre-deposit 10% of the amount of tax i.e. Rs. 3,55,334/-. However, the respondents have recovered an amount of Rs. 46 lakh and therefore it is prayed that the respondents be directed to refund the remaining amount of Rs. 42,44,664/- to the petitioner - such contention is misconceived in view of the provisions contained in Section 73(9) read with Sections 78 and 107 of the Act. Petition dismissed.

Summary

Issues:
The issues involved in the judgment are related to the petition filed under Article 226 of the Constitution of India, seeking relief from the High Court to quash attachment proceedings under Section 83 of the Act, refund of withdrawn amounts, and pre-deposit requirements under Section 107 of the Act.

Issue 1: Attachment Proceedings under Section 83 of the Act
The petitioner, a registered company engaged in the supply of goods, challenged the order of provisional attachment of property under Section 83 of the Act, claiming that a significant amount was withdrawn from their bank account. The petitioner sought the court to quash the attachment proceedings and direct the respondents to return the withdrawn amounts. The respondents argued that the withdrawal was in accordance with the Act and that the petitioner could seek a refund if their appeal is successful. The court dismissed the petition, stating that the petitioner could request a refund if the appeal is allowed, but the current petition was misconceived.

Issue 2: Pre-deposit Requirement under Section 107 of the Act
The petitioner contended that they were required to pre-deposit 10% of the tax amount before the Appellate Authority under Section 107 of the Act. However, the respondents had already withdrawn a substantial sum from the petitioner's bank account, leaving a lesser amount for pre-deposit. The court held that the petitioner could request a refund if the appeal is successful, but the current petition seeking a refund was premature. The court emphasized that the petitioner could make such a request before the Appellate Authority if their appeal is allowed.

Conclusion:
The High Court dismissed the petition filed under Article 226 of the Constitution of India, as it found the petitioner's contentions regarding refund of withdrawn amounts premature and misconceived. The court clarified that if the appeal filed by the petitioner is successful, they can request a refund before the Appellate Authority as per the provisions of the Act.