2024 (9) TMI 1393 - HC - GST

Challenge to Order of Seizure - challenge to provisional attachment of bank account - pre-show cause intimation and SCN - HELD THAT - Upon issuance of the pre-show cause notice intimation and the show cause notice which was based upon the records, papers, documents etc., seized by the respondents, the same would not be required any longer and reliance placed on the said documents would not subsist any longer and the respondents are to be directed to return back the said documents, especially when the petitioner is into real estate business and the documents are required for the purpose of its business. Under these circumstances, though the order of seizure dated 09.01.2024 does not require to be interfered with in the light of the issuance of the pre-show cause notice intimation and the show cause notice issued by the respondents, suffice it to state that direction are to be issued to the respondents to return back all the documents seized by them vide Annexure-E dated 09.01.2024. Insofar as the impugned provisional bank attachment orders at Annexures-L1, L2 and L3 dated 28.05.2024 are concerned, in the light of the specific contention of the petitioner that out of the total alleged liability of Rs. 5,10,47,405/-, the petitioner has only discharged Rs. 3,60,00,000/- in the States of Karnataka and Telangana coupled with the interim order passed by this Court on 21.08.2024 staying the attachment of bank accounts, without prejudice to the rights of the respondents to proceed further after taking appropriate decision in pursuance of the show cause notice, it is deemed just and appropriate to set aside the provisional bank attachment order reserving liberty in favour of the respondents to proceed in this regard. The petition is hereby partly allowed.

Summary

Issues:
1. Quashing of Order of Seizure dated 09.01.2024
2. Quashing of provisional attachment of bank account dated 28.05.2024
3. Quashing of pre-show cause intimation dated 28.06.2024
4. Quashing of Show Cause Notice dated 02.08.2024

Analysis:

Issue 1: Quashing of Order of Seizure dated 09.01.2024
The petitioner challenged the Order of Seizure dated 09.01.2024, issued under Section 67 of the CGST Act. The petitioner argued that the documents seized during the search were necessary for their business operations. The court noted that the seizure order had led to the issuance of a pre-show cause notice and a show cause notice. The court held that since the notices were based on the seized documents, the seizure order had served its purpose. The court directed the respondents to return all seized documents to the petitioner for business purposes.

Issue 2: Quashing of provisional attachment of bank account dated 28.05.2024
The petitioner sought to quash the provisional attachment of their bank accounts issued under Section 83 of the CGST Act. The petitioner claimed to have already paid a significant portion of the alleged liability. The court considered the petitioner's argument and noted that the petitioner had paid a substantial amount towards the liability. The court, while setting aside the provisional bank attachment order, allowed the respondents to proceed further after due consideration of the show cause notice.

Issue 3: Quashing of pre-show cause intimation dated 28.06.2024
The petitioner contested the pre-show cause intimation issued under Section 74 of the CGST Act. The court observed the petitioner's compliance with the intimation and subsequent responses. The court did not find merit in the respondents' opposition to the petition and directed the petitioner to reply to the show cause notice, providing an opportunity for a fair hearing and appropriate orders in accordance with the law.

Issue 4: Quashing of Show Cause Notice dated 02.08.2024
The petitioner challenged the Show Cause Notice issued under Section 74 of the CGST Act. The court directed the petitioner to submit a reply to the notice and directed the respondents to notify the petitioner about the date of appearance, ensuring a fair and reasonable opportunity for the petitioner to present their case. The court emphasized the need for compliance with the legal procedures and laws governing the matter.

This judgment highlights the court's consideration of the petitioner's arguments regarding the legality of the seizure order, bank attachment, and show cause notices under the CGST Act. The court's decision to quash the bank attachment and direct the return of seized documents underscores the importance of procedural fairness and adherence to legal requirements in tax matters.