2023 (8) TMI 172 - HC - GST

Attachment of Bank account - respondents submits that the letter addressed to various customers of the petitioner was withdrawn, and the same was also communicated to the customers of the petitioners - HELD THAT - A perusal of the files, produced today in the Court, indicates that no such attachment orders under Section 83 of the CGST Act were issued - Insofar as the provisional attachment of the bank account is concerned, even if an order under Section 83 of the CGST Act was issued, the same would lapse by virtue of Section 83(2) of the CGST Act. Section 83 of the CGST Act empowers the Commissioner to issue orders for provisional attachment of assets including the bank account of the taxpayer provided that it is necessary to protect the interest of the Revenue. There are no specific noting in the files, to the effect, that such an action is imperative in the facts of the present case. Although, the files produced today indicate that there are allegations of wrongful availment of Input Tax Credit. The respondent authorities are also investigating the chain of suppliers, and there is nothing to the effect that indicates that some of the entities which had purportedly supplied material to the petitioner have not responded to the notices issued by the concerned authorities. It is also the respondents' case that no order under Section 83 of the CGST Act operating against the petitioner and the communications issued to various suppliers have been withdrawn - In view of the above, the petitioner's grievance stands addressed. Petition disposed off.

Summary

Issues involved:
The issues involved in this case include the impugning of a communication/order under Section 83 of the Central Goods & Service Tax Act, 2017, freezing of the petitioner's bank account, communication sent to various customers of the petitioner directing them not to make payments, and the provisional attachment of assets.

Impugning Communication/Order:
The petitioner challenged a communication/order dated 29.04.2019 issued under Section 83 of the CGST Act, which was not served on the petitioner. The petitioner learned about its bank account being frozen through a subsequent communication from Canara Bank. The Court noted that no order in the requisite Form GST DRC-22 was issued to the petitioner.

Communication to Customers:
The petitioner also contested the communication sent to its customers directing them not to make payments for goods supplied. The respondents informed the Court that the communication to customers was withdrawn, and the competent authority requested the petitioner's customers to make payments directly into the petitioner's bank account.

Provisional Attachment of Assets:
The Court observed that no orders of provisional attachment were issued to the petitioner under Section 83 of the CGST Act. It was highlighted that there was no specific recording of satisfaction by the Commissioner that provisional attachment was necessary to safeguard the interests of Revenue, despite ongoing investigations into alleged wrongful availment of Input Tax Credit.

Operative Orders:
The respondents confirmed that no order under Section 83 of the CGST Act was currently operational against the petitioner, and the communications issued to various suppliers had been withdrawn. Even if such an order was issued, it would have lapsed as per Section 83(2) of the CGST Act. The communications restraining the petitioner's customers from making payments were deemed unauthorized.

Assurances and Disposal of Petition:
The learned counsel for the respondents assured the Court of being more cautious in issuing orders like attachment of bank accounts in compliance with the CGST Act. Consequently, since the freezing of the petitioner's bank account and the communications to customers were no longer in effect, the Court disposed of the petition without further orders.