2024 (7) TMI 1385 - HC - GST

Provisional attachment of bank account u/s 83 of the Central Goods and Services Tax Act, 2017 - wrongful claim of ITC - fake supplies - HELD THAT - The Commissioner has considered it apposite to provisionally attach the petitioner s bank account, to the extent of ₹ 26.91 lacs being the amount of ITC claimed in respect of allegedly fake supplies. It cannot be accepted that the exercise of power by the Commissioner is unwarranted. The facts clearly indicate the Commissioner had found it necessary to provisionally attach the petitioner s bank account to protect the interest of the revenue. The facts as obtaining in this case clearly indicate that material available with the Commissioner has a live nexus with his opinion. And, the impugned order cannot be faulted. The petition is unmerited and accordingly dismissed.

Summary

Issues:
Impugning an order provisionally attaching a bank account under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act).

Analysis:
The petitioner challenged an order dated 26.06.2024, passed by the Principal Additional Director General of GST Intelligence, Gurugram Zonal Unit, rejecting objections to the provisional attachment of a bank account under Section 83 of the CGST Act. The petitioner alleged that the copy of the order attaching the bank account was not provided to him, although his banker, ICICI Bank, informed him about the attachment. The Commissioner provisionally attached the bank account based on investigations that revealed the petitioner claimed Input Tax Credit (ITC) amounting to &8377;26,91,938 from two suppliers, M/s Gupta Enterprises and M/s Sunrise Ventures, who were found to be fake entities. M/s Gupta Enterprises, supposedly owned by Vikram, was found non-existent during physical verification, with Vikram revealed to be a taxi driver. Similarly, M/s Sunrise Ventures, owned by Shesh Nath Prasad, a Taekwondo player, was also identified as a fake entity created by Shyam Dev Gupta. Shyam Dev Gupta admitted to issuing invoices without supplying any goods from M/s Sunrise Ventures.

The Commissioner justified the provisional attachment of the petitioner's bank account to safeguard revenue interests, considering the nexus between the material available and the decision to attach the account. The High Court upheld the Commissioner's action, stating that the facts supported the necessity of the attachment to protect revenue interests. The Court found no fault with the impugned order and dismissed the petition, along with disposing of pending applications.